SEBI (Securities & Exchange board of India)

SEBI is a watch on Indian security & Commodity transaction.

It is a watch dog on share market.

It was established in 1988 in Bombay.

In 1992 it got statutory status.

 It is managed by a board there are 9 members in the board

Power of S.E.B.I.

- To protect the interests of investors in Securities and to promote the development of, and to regulate the securities market .

Security" is defined broadly to include a wide array of investments, such as stocks, bonds, notes, debenture

-It can check the record & accounts of broker, can get information from bank & financial institutes.

-It can impose penalty on the corporate companies which can be  up to 3 times of  subjected amount.

-FMC (Forward Markets Commission)has been  merged in 2015  with much bigger capital markets watchdog the Securities and Exchange Board of India (SEBI) to create a unified regulatory body.

-Control on  Inside trading(IAS/MPPSC -Exam) led by S.E.B.I. –

-SEBI has three functions rolled into one body: …….quasi-legislative, quasi-judicial and ..quasi-executive. It drafts regulations in its legislative capacity, it conducts investigation and enforcement action in its executive function and it passes rulings and orders in its judicial capacity.

-Though this makes it very powerful, there is an appeal process to create accountability.

There is a…… Securities Appellate Tribunal which is a three-member tribunal   headed by a former judge of the Bombay High Court. 

-A second appeal lies directly to the ……Supreme Court.

Powers/ Investor Protection Measures by SEBI

For the discharge of its functions efficiently, SEBI has been vested with the following powers:

1. to approve by−laws of stock exchanges .
2. to require the stock exchange to amend their by laws.
3. Inspect the books of accounts and call for periodical returns from recognized stock exchanges.
4. Inspect the books of accounts of a financial intermediaries (Banks, insurance companies, pension funds,  mutual funds etc. are the examples of financial intermediaries.).
5. Compel certain companies to list their shares in one or more stock exchanges.

6-         Registration brokers.

7-Keeping a check on frauds and unfair trading methods related to the securities market.

8- Observing and regulating major transactions and take-over of the companies.

9- Train the intermediaries of the business. Inspecting and auditing the security exchanges (SEs) and intermediaries

10-Registering investment schemes like Mutual fund & venture Capital funds, and regulating their functioning.

11 -Carry out investor awareness and education programme.

-SEBI has enjoyed success as a regulator by pushing systematic reforms aggressively and successively.

-SEBI is credited for quick movement towards making the markets electronic and paperless by introducing T+1(Settlement is done in 2 days after Trade date) from may 2024

- SEBI has also been instrumental in taking quick and effective steps in light of the global meltdown and the Satyam fiasco. 

In October 2011, it increased the extent and quantity of disclosures to be made by Indian corporate promoters.

In light of the global meltdown, it liberalised the takeover code to facilitate investments by removing regulatory structures. In one such move, SEBI has increased the application limit for retail investors to Rs 2 lakh, from Rs 1 lakh at present.

Supreme Court of India heard a Public Interest Litigation (PIL) filed by India Rejuvenation Initiative that had challenged the procedure for key appointments adopted by Govt of India. The petition alleged that, "The constitution of the search-cum-select

The regulatory institution is under  severe attack from powerful corporate interests operating concertedly to undermine SEBI".

Finance Minister's office, and especially his advisor were trying to influence many cases before SEBI, including those relating to Sahara Group, Reliance, Bank of Rajasthan.