WELCOME

SECURITIES EXCHANGE BOARD OF INDIA( SEBI)

SBI INTRODUCTION
In 1988 the Securities and Exchange Board of India (SEBI) was established by the Government of India through an executive resolution, and was subsequently upgraded as a fully autonomous body (a statutory Board) in the year 1992 with the passing of the Securities and Exchange Board of India Act (SEBI Act) on 30th January 1992. In place of Government Control, a statutory and autonomous regulatory board with defined responsibilities, to cover both development & regulation of the market, and independent powers have been set up. Paradoxically this is a positive outcome of the Securities Scam of 1990-91.

Securities and Exchange Board of India

To ensure effective regulation of the Capital Market, SEBI Act,1992 was enacted to establish SEBI with statutory powers for; Protecting the interest of investors in securities Promoting the development of the securities market Regulating the seccurites market

OTHER POWERS
SEBI can specify the matters to be disclosed and the standard of disclosure required for the protection of investors in respect of issues; can issue directions to all intermediaries and other person associated with the securities market. All the intermediaries and persons associated with securities market viz.., brocker and sub broker, underwriters, merchant banker, share transfer agent, registrar to the issue, depositeries,depository participants, portfolio managers,forien institutional investors, custodians,mutual funds, credit rating agencies shall be registered with SEBI.

CONSTITUTION OF SEBI
The Central Government has constituted a Board by the name of SEBI under section of SEBI Act. The Head Office of SEBI is in Mumbai.

ADMINISTRATION
Section 11 of the SEBI Act provides that to protect the interest of investors in securities and to promote the development of and to regulate the securities market by such measures, it is the duty of the Board. It has given power to the Board to regulate the business in Stock Exchanges, register and regulate the working of stock brokers, sub-brokers, share transfer agents, bankers to an issue, trustees of trust deeds, registrars to an issue, merchant bankers, underwriters, portfolio managers, investment advisers, etc., also to register and regulate the working of collective investment schemes including mutual funds, to prohibit fraudulent and unfair trade practices and insider trading, to regulate take-overs, to conduct enquiries and audits of the stock exchanges, etc.

 All the stock brokers, sub-brokers, share transfer agents, bankers to an issue, trustees of trust deed, registrars to an issue, merchant bankers, underwriters, portfolio managers, investment advisers and such other intermediary who may be associated with the Securities Markets are to register with the Board under the provisions of the Act, under Section 12 of the Sebi Act. The Board has the power to suspend or cancel such registration. The Board is bound by the directions vested by the Central Government from time to time on questions of policy and the Central Government reserves the right to supersede the Board. The Board is also obliged to submit a report to the Central Government each year, giving true and full account of its activities, policies and programmes. Any one of the aggrieved by the Board's decision is entitled to appeal to the Central Government

SEBI consist of the fallowing members

A Chairman Two members from amongst the officials of the Ministers of the Central Government dealing with the Finance and administration of the ompanies,act 1956. One member from amongst the officials of the Reserve Bank Of India; Five other members from whom at least three shall be whole tme members to be appointed by the Central Government

FUNCTIONS OF SEBI
Regulating the business in stock exchanges and other securities market.. Registering and regulating the working of stock brokers, sub brokers, share transfer agent, merchent bankers, underwriters, portfolio mangers and such other intermediaries who may be associated with securities market. Registering and regulating the working of depositories, participants, custodian of securities, foreign institutional investors

Promoting and regulating self regulatory organisation Promoting investors education and training of intermediaries of seccurities market Prohibiting fraudulent and unfair trade practices relating to the securities market. Prohibiting insider trading in securities;

Does SEBI approve the contents of the issue?

It is to be distinctly understood that submission of offer document to SEBI should not in any way be deemed or construed that the same has been cleared or approved by SEBI. The Lead manager certifies that the disclosures made in the offer document are generally adequate and are in conformity with SEBI guidelines for disclosures and investor protection in force for the time being. This requirement is to facilitate investors to take an informed decision for making investment in the proposed issue

Who decides the price of an issue?

Indian primary market ushered in an era of free pricing in 1992. Following this, the guidelines have provided that the issuer in consultation with Merchant Banker shall decide the price. There is no price formula stipulated by SEBI. SEBI does not play any role in price fixation. The company and merchant banker are however required to give full disclosures of the parameters which they had considered while deciding the issue price. There are two types of issues one where company and LM fix a price (called fixed price) and other, where the company and LM stipulate a floor price or a price band and leave it to market forces to determine the final price (price discovery through book building process).

REGISTRATION OF INTERMEDIARIES
The intermediaries and person associated with securities market shall buy , sell or deal in securities after obtaining a certificate of Registration from SEBI, as required by section 12

SEBI RULES
SEBI( Stock Brokers & sub-Brokers) Rules, 1992 SEBI (Stock Brokers & sub-Brokers) Rgulations,1992 SEBI ( Insider Trading) Regulations,1992 SEBI ( Prohibition of Fraudulent and Unfair Trade Practices Relating to the Securities Markets) Regulations,1995