SECURITIES AND

EXCHANGE BOARD
OF INDIA
  Prior to SEBI the security markets and stock exchange
were regulated by several Acts, which were:
- The Bombay Securities Contracts Control Act, 1925
- The Capital Issues (Control) Act, 1947
- The Securities Contracts (Regulation) Act, 1956
A BRIEF - Registrar of Companies (The Indian Companies Act,
1956)

HISTORY  For a healthy growth of capital markets and to prevent

malpractices in trading, the Government subsequently
decided to “set up a separate board for the regulation
and orderly functioning of Stock Exchange and the
securities industry”
  In July 1987, the Cabinet Committee on
Economic Affairs approved the broad features of
SEBI and process of establishment of SEBI was
commenced.

A BRIEF  The statement of Purpose and Approach outlined

HISTORY twin objectives of SEBI as,
1. Promoting healthy and orderly development
(Contd..) of securities markets.
2. Ensuring adequate investor protection and
emphasized the developmental philosophy
with which SEBI would operate.
  SEBI was established on April 12, 1992 under
the SEBI Act, 1992.

 SEBI is the regulator for the Securities Market in

India.
INTRODUCTION
 It is managed by a Board comprising of nine
members including the chairman.

 It is headquartered at the Bandra Kurla

Complex in Mumbai, India.

4
  The Preamble of the Securities and Exchange
Board of India describes the basic functions of
the Securities and Exchange Board of India as:

SEBI "...to protect the interests of investors in securities

PREAMBLE and to promote the development of, and to
regulate the securities market and for matters
connected therewith or incidental thereto"
 Protect interest of investors

Development of securities market

Provides a platform for people

associated with securities market

Prohibits inner trades in securities

Monitors substantial acquisitions of

shares & take-over
Takes care of R&D to ensure securities
market is efficient at all times
Ensures investors are educated on
intermediaries of securities markets
  The SEBI board has three main powers:
1. Quasi-Judicial: Authority to deliver judgements related to
fraud & other unethical practices in terms of the securities
AUTHORITY market. This helps to ensure fairness, transparency, and
accountability in the securities market.
& POWER
2. Quasi-Executive: Empowered to implement the
regulations and judgements made and to take legal
action against the violators. It is also authorized to inspect
Books of accounts and other documents if it comes across
any violation of the regulations.

3. Quasi-Legislative: Reserves the right to frame rules and

regulations to protect the interests of the investors. Some
of its regulations consist of insider trading regulations, listing
obligation, and disclosure requirements. These have been
formulated to keep malpractices at bay.
 Primary Market • Deals with all policy matters
and regulatory issues relating
Department to primary market

Issue Mgt. &

• Concerned with inspection of
Intermediaries offer documents
dept.
ORGANISATION
Secondary • Looks after all policy &
regulatory issues &
Market Dept. administration

Institutional • Concerned with framing

policy for foreign Institutional
investment Dept. investors
  In addition to this, there are two other
departments: Legal Department and
Investigation Department, also
headed by officials of the rank of
Executive Directors.
ORGANISATION  SEBI has two Advisory Committees, one
(Contd..) each for primary and secondary
markets. They provide advisory inputs
in framing policies and regulations.
These committees are non-statutory in
nature and SEBI is not bound by the
committees.
 BOARD
MEMBERS
 BOARD
MEMBERS
 Satyam scam: Securities Appellate Tribunal (SAT) overturns SEBI
order banning PW for 2 years saying that "SEBI has no authority to
look into the quality of audit standards and audit services, it can
only take remedial and preventive action.”
 Deutsche Bank may get SEBI's nod to operate as commodity
custodian for MFs, move which will enable participation from
institutional investors, including mutual funds and portfolio
management service providers, in such segment.
 SEBI rejigs primary market advisory panel
 SEBI asks SEs to draw up framework on fines:
- Asked stock exchanges to come up with a uniform framework
to levy penalties on brokers who report incorrect margins.
- Considering the principle of ‘proportionality’, the fine shall be
charged to the member based on the materiality of non-
compliance done by the member which may include factors
such as number of instances, repeated violations, etc.