SEBI–The Securities and Exchange Board of India is the primary regulating authority of the securities market in our country. SEBI was formed to ensure the genuine interests of the investors, the orderliness of the capital markets and the sanity of the market in India. It was set up in 1992 by the Government of India.

Activities it controls include those of stock exchange, mutual funds and all other financial institutions to ensure that they are operating within the laid down laws and requirements.

Read More: SEBI Launches Saarthi 2.0: Personal Finance App For Investors

What Is The History Of SEBI?

The securities market up until SEBI was controlled by the Controller of Capital Issues (CCI). But as time went by, especially with the liberalisation of the financial market there was a need for a more competent and independent regulatory agency. This led to the formation of the Securities Exchange Board of India (SEBI) in 1992 which was made statutory and provided with autonomous status through the SEBI Acts.

Subsequently, SEBI has floated out several changes over the years to curb other related tricks and bring more openness to the market.

What Are The Objectives Of SEBI?

SEBI has several key objectives, including:

1. Investor Protection: With the increase in capital markets the investors must be protected from any harmful business practices and they should be provided with correct and timely information.

2. Regulation and Development: SEBI acts as a watchdog of the securities market and formulates rules and standard operating procedures applicable to all the participants in the market thus making it efficient.

3. Prevention of Insider Trading: SEBI also seeks to stop insider trading which is a practice whereby somebody with insider information trades unjustly.

4. Promotion of Fair Practices: SEBI has a code of regulation for the conduct of market players, whereby all making in markets are made ethically.

5. Prohibition of Fraud: SEBI has the power to protect the market from fraudulent and unfair practices being committed which in turn entails the protection of the market.

6. Development of the Secondary Market: To improve the liquidity dimensions of the secondary market, SEBI brings changes into the framework of trading.

Read More: What Is The RBI's New Credit Information Guidelines? Learn About Its Implications on Borrowers & Lenders!

What Is The Organisational Structure Of SEBI?

SEBI is managed by a board consisting of:

• An appointed chairman from the Union Government of India.

• Two members including at least one from the Union Finance Ministry.

• One member from the Reserve Bank of India as a part of the panel of experts for auditing.

• Five other members nominated by the Union Government

SEBI, have regional offices in New Delhi, Calcutta, Madras, and Ahmedabad. Besides that, SEBI has located several local offices scattered across the nation.

What Are The Functions of SEBI?

SEBI performs various functions to achieve its goals:

• Protecting Investors: Protects investors’ stakes/interests.

• Regulating Market Activities: Translates business activities into the securities market.

• Providing a Platform: Helps in market transactions by the brokers, portfolio managers and investment advisers.

• Supervising Market Entities: Oversees the actions and behaviour of depositors, credit rating agencies as well as foreign investors.

• Educating Investors: Nonetheless, their main role lies in offering information to investors in relation to the existing market and the intermediaries.

• Preventing Fraud: Provides action against all frauds in the market.

• Overseeing Takeovers: Supervises takeovers and shares acquisitions in the company.

• Research and Development: It also helps ensure that the market remains up-to-date in its research findings.

Read More: Pradhan Mantri Shram Yogi Maan-dhan (प्रधानमंत्री श्रम योगी मानधन योजना) | PM-SYM Registration Online

What Are SEBI’s Powers And Its Role In India?

SEBI has three types of powers to fulfil its role:

• Quasi-Judicial Powers: SEBI can sort out securities law violations, perform hearings, look into the proofs and also pass orders to sort out the issue.

• Quasi-Executive Powers: SEBI is an autonomous body which has the power to remove the securities law violators, and can find the violators and conduct inquiries into the violations.

• Quasi-Legislative Powers: SEBI has the power to make and enforce rules and regulations for the securities market and also frame policies for its growth.

Read More: SEBI’s New Decision For Demat Account Holders: Good News For BSDA Holders

Conclusion

SEBI has an important role in maintaining fairness and transparency in the securities market of India. In that sense, SEBI’s primary duty is to safeguard the investors and to make sure that the rules are followed which helps contribute to the proper and fair functioning of the market. Over the years, the corporation has been actively involved in the fight against fraud and other unfair practices that are anathema to the sustenance of the financial system. That is why it is crucial to understand what SEBI is, what it does and what power it possesses to regulate the securities market.

For more such instant updates, stay connected with the Jaagruk Bharat.

Important Links

Official Website: https://www.sebi.gov.in/index.html

Contact Information: https://www.sebi.gov.in/contact-us.html

Legal Provisions Under SEBI: https://www.sebi.gov.in/legal.html