Description
The Securities and Exchange Board of India (frequently abbreviated SEBI) is the regulator for the securities market in India. It was established in the year 1988 and given statutory powers on 12 April 1992 through the SEBI Act, 1992
Securities and Exchange Board of India
Emergence of SEBI The capital market in India has been evolving for the last 5 years. The market has shown a great deal of buoyancy both in terms of market capitalization and variety. This has given rise to the need to regulate, moderate and set standards for an orderly growth of capital markets in the country. The opening up of the economy and the emergence of active stock market gave rise to the need to put in place an elaborate control mechanism to ensure orderly growth and functioning of the SEs and measures to protect investor's interest. These requirements saw the emergence of Securities and Exchange Board of India [SEBI] as a powerful controller and watch dog institution in all matters relating to the orderly growth of capital markets in India. SEBI has become functional from 30th of January, 1992 as a corporate body with its headquarters in Mumbai. Composition of SEBI The Securities and Exchange Board of India (SEBI) was formed under the SEBI Act in order to administer the provisions of the Act. The Board consists of one Chairman and five members. One each from the Department of Finance & Law of the Central Government, one from Reserve Bank of India and 2 other persons and having its head office in Bombay and regional offices in Calcutta, Delhi, and Madras. The Central Government possesses 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 who has a second or casting vote. Functions of SEBI 1. Promoting the development and regulate the securities market 2. Regulating the business of SEs and any other securities markets, such as mutual funds and IPO 3. Registering and regulating various players associated with securities market, such as a. Stock brokers or sub brokers b. Share transfer agents c. Bankers to an issue
d. Trusts e. Registrars to an issue f. Merchant bankers
g. Under writes h. Portfolio managers i. Investment advisors
4. Registering and regulating the working of the following:
a. Depositories b. Depository participants c. Custodians
d. Foreign Institutional Investors e. Credit rating Agencies 5. Prohibiting fraudulent and unfair trade practices relating to stock market 6. Prohibiting insider trading
7. Call for information and records from banks, any other authority, board, or corporation constituted by or under any Central, State or Provincial Act 8. Specify listing and transfer of securities 9. SEBI has powers to cause an investigation to be conducted if there is a violation of rules and regulations issued by the board by any intermediary or person associated with securities market 10. SEBI enjoys power to investigate, judge, and penalize any intermediary or person connected with stock market. The penalties may be imposed for: a. Failure to enter into an agreement with clients b. Failure to redress the investor's grievances c. Default in case of Mutual Funds
d. Failure of an Asset Management Company to observe the rules and regulations e. Failures in case of stock brokers to issue contract notes f. Penalize for insider trading
g. Failure to disclose acquisitions and take over h. Fraudulent trade practices 11. In the interest of investor and the securities market, the board may take either pending investigation or enquiry or on completion of such investigation or enquiry, namely: a. Suspend the trading of any security in a SE b. Restrain persons from accessing securities market c. Prohibit any person who is associated with securities market to buy, sell, or deal in securities
d. Suspend an office bearer of SE or SRO [Self Regulatory Organizations]
e. Impound and retain the proceeds or securities in respect of any transaction which is under investigation f. To attach bank accounts under certain circumstances
g. Direct any intermediary or any other person associated with securities market not to dispose of or alienate an asset which is under investigation
doc_654145825.doc
The Securities and Exchange Board of India (frequently abbreviated SEBI) is the regulator for the securities market in India. It was established in the year 1988 and given statutory powers on 12 April 1992 through the SEBI Act, 1992
Securities and Exchange Board of India
Emergence of SEBI The capital market in India has been evolving for the last 5 years. The market has shown a great deal of buoyancy both in terms of market capitalization and variety. This has given rise to the need to regulate, moderate and set standards for an orderly growth of capital markets in the country. The opening up of the economy and the emergence of active stock market gave rise to the need to put in place an elaborate control mechanism to ensure orderly growth and functioning of the SEs and measures to protect investor's interest. These requirements saw the emergence of Securities and Exchange Board of India [SEBI] as a powerful controller and watch dog institution in all matters relating to the orderly growth of capital markets in India. SEBI has become functional from 30th of January, 1992 as a corporate body with its headquarters in Mumbai. Composition of SEBI The Securities and Exchange Board of India (SEBI) was formed under the SEBI Act in order to administer the provisions of the Act. The Board consists of one Chairman and five members. One each from the Department of Finance & Law of the Central Government, one from Reserve Bank of India and 2 other persons and having its head office in Bombay and regional offices in Calcutta, Delhi, and Madras. The Central Government possesses 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 who has a second or casting vote. Functions of SEBI 1. Promoting the development and regulate the securities market 2. Regulating the business of SEs and any other securities markets, such as mutual funds and IPO 3. Registering and regulating various players associated with securities market, such as a. Stock brokers or sub brokers b. Share transfer agents c. Bankers to an issue
d. Trusts e. Registrars to an issue f. Merchant bankers
g. Under writes h. Portfolio managers i. Investment advisors
4. Registering and regulating the working of the following:
a. Depositories b. Depository participants c. Custodians
d. Foreign Institutional Investors e. Credit rating Agencies 5. Prohibiting fraudulent and unfair trade practices relating to stock market 6. Prohibiting insider trading
7. Call for information and records from banks, any other authority, board, or corporation constituted by or under any Central, State or Provincial Act 8. Specify listing and transfer of securities 9. SEBI has powers to cause an investigation to be conducted if there is a violation of rules and regulations issued by the board by any intermediary or person associated with securities market 10. SEBI enjoys power to investigate, judge, and penalize any intermediary or person connected with stock market. The penalties may be imposed for: a. Failure to enter into an agreement with clients b. Failure to redress the investor's grievances c. Default in case of Mutual Funds
d. Failure of an Asset Management Company to observe the rules and regulations e. Failures in case of stock brokers to issue contract notes f. Penalize for insider trading
g. Failure to disclose acquisitions and take over h. Fraudulent trade practices 11. In the interest of investor and the securities market, the board may take either pending investigation or enquiry or on completion of such investigation or enquiry, namely: a. Suspend the trading of any security in a SE b. Restrain persons from accessing securities market c. Prohibit any person who is associated with securities market to buy, sell, or deal in securities
d. Suspend an office bearer of SE or SRO [Self Regulatory Organizations]
e. Impound and retain the proceeds or securities in respect of any transaction which is under investigation f. To attach bank accounts under certain circumstances
g. Direct any intermediary or any other person associated with securities market not to dispose of or alienate an asset which is under investigation
doc_654145825.doc