SEBI

Securities and Exchange

Board of India
 Establishment and Administration
• In 1988
• By government of India
• Through an executive resolution
In 1992 upgraded as fully
autonomous body
With the passing of the
Securities and Exchange Board
of India Act (SEBI Act) on 30th
January 1992.
Paradoxically this is a
positive outcome of the
Securities Scam of 1990-91.
SEBI appointed the
L. C. Gupta Committee in
1998 to recommend the
regulatory framework for
derivatives trading and
suggest bye-laws for
Regulation and Control of
Trading and Settlement of
Derivatives Contracts
The Board of SEBI in its
meeting held on May 11, 1998
accepted the
recommendations of the
committee and approved
SEBI then appointed the J. R.
Verma Committee to
recommend Risk Containment
Measures (RCM) in the Indian
Stock Index Futures Market.
SEBI came into force on
January 30, 1992.
It is a brief act containing 35
sections
The SEBI Act governs all the
Stock Exchanges and the
Securities Transactions in
India.
It consists of one Chairman and five
members.

One each from the department of

Finance and Law of the Central
Government

one from the Reserve Bank of India

two other persons and having its head

office in Bombay and regional offices in
Delhi, Calcutta and Madras
The Central Government
reserves the right to terminate
the services of the Chairman
or any member of the Board.
The Board decides
questions in the meeting by
majority vote with the
Chairman having a second
or casting vote.
 Objectives and Working
The basic objectives of the Board are
identified as:
• to protect the interests of investors in
securities;
• to promote the development of Securities
Market;
• to regulate the securities market and
• for matters connected therewith or
incidental thereto
SEBI has introduced the
comprehensive regulatory
measures, prescribed registration
norms, the eligibility criteria, the
code of obligations and the code of
conduct for different intermediaries
like, bankers to issue, merchant
bankers, brokers and sub-brokers,
registrars, portfolio managers, credit
rating agencies, underwriters and
others.
It has framed bye-laws, risk
identification and risk
management systems for
Clearing houses of stock
exchanges, surveillance
system etc. which has made
dealing in securities both safe
and transparent to the end
investor.
Two broad approaches of SEBI
is to integrate the securities
market at the national level, and
also to diversify the trading
products
This is to increase the number of
traders including banks, financial
institutions, insurance
companies, mutual funds,
primary dealers etc. to transact
through the Exchanges.
In this context the introduction
of derivatives trading through
Indian Stock Exchanges
permitted by SEBI in 2000 AD
is a real landmark.
As it is a regulatory body,
SEBI cannot guarantee or
undertake the repayment of
money to the investors. It is
SEBI's endeavour to educate
the investors of the general
risk perception of such
schemes.
Investors can also approach
District Consumer Redressal forums
in case entities fail to honour their
commitments or for any deficiency in
service.
For bouncing of cheques, investors
can move the Courts under section
138 of the Negotiable Instruments
Act. The right to file criminal
complaint exclusively vests with the
beneficiary of the cheque.
THANK YOU