SECURITIES AND EXCHANGE BOARD OF INDIA ( SEBI)

The establishment of SEBI was a land mark government measure to monitor and regulate capital market activities and to promote healthy development of the market.

It was constituted in 1988 by a resolution of Government of India and was made a statutory body by Securities and Exchange Board of India Act 1992.

 

Objectives / Purpose of SEBI Act:-

·       To protect the interests of investors in securities

·       To promote the development of the securities market

·       To regulate the securities market

·       For matters connected therewith or incidental too.

 

Powers and functions of SEBI:- 

 

Main function of SEBI is to protect the interest of investors in securities and to promote the development and to regulate the securities market by such measures as it thinks fit.

Following are the powers granted to SEBI for fulfilling the above objective:-

·       Regulating the business in stock exchanges and any other securities markets

·       Registering and regulating the working of stock brokers, sub brokers, share transfer agents, registrars to an issue, merchant bankers and other intermediaries who may be associated with securities market in any manner.

·       Registering and regulating the working of collective investment schemes, including Mutual funds.

·       Promoting and regulating self regulatory organizations

·       Prohibiting Fraudulent and unfair trade practices

·       Promoting investors education and teaching of intermediaries

·        Regulating substantial acquisition of shares and take over of companies.

·       Levying fees or other charges for carrying out the purposes

·       Conducting research

 

Limitation of SEBI:- 

·       The Central Government has authorized SEBI to frame its rules and regulation for actively monitoring capital markets. These rules and regulations will have to be approved by the government first.This will cause unnecessary delay and interference by the Finance Minister.

·       SEBI will have to seek prior approval for filling criminal complaints for violations for the regulations. This will again cause delay at government level.

·       SEBI has not been given autonomy. Its Board of Directors is dominated by government nominees. Out of 5 directors only 2 can be from outside and these are to represent the Ministries of Finance, Law and Reserve Bank of India..

 

SEBI has regulated:-

a)               Primary Market

b)               Secondary Market

c)                Mutual funds

d)               Foreign Institutional Investments