Everything you need to know about SEBI
The primary responsibility of SEBI (Securities and Exchange Board of India) is to control the Indian securities market.
Having its headquarters in the BandraKurla Complex in Mumbai, it happens to be an autonomous and statutory body established in 1992 by the Ministry of Finance.
The SEBI consists of a member from the Reserve Bank of India, 2 members from the Ministry of Finance, as well as 5 other members appointed by the Indian Government.
In excess of 20 different departments are controlled by this organization.
Apart from the head office which is situated in Mumbai, the SEBI likewise has other local offices in the Eastern, Western, Northern, and Southern regions of India in Kolkata, Ahmedabad, New Delhi, and Chennai respectively.
Table of Contents
Functions of SEBI
1. Regulatory Functions
• Register and control the functioning of the overseas institutional investors, participants, depositories, and custodians of securities, credit rating agencies as well as other intermediaries.
• Controlling takeover of companies and substantial procurement of shares.
• Control securities markets as well as the business in stock exchanges.
• Register and control the functioning of mutual funds, venture capital funds, plus other schemes.
• Present requests for inspection, and information, as well as conducting audits and inquiries.
2. Protective Functions
• Allot directions to safeguard the interests of intermediaries, investors, balance of trade, and fair trade.
• Disallow securities markets connected to unfair and fake trade practices.
• Forbid insider trading in securities.
3. Development Functions
• Promote and control self-regulatory organizations.
• Promote the education of investors and training of securities markets’ intermediaries.
The primary duties of SEBI
The supervision of SEBI consists of intermediaries to ensure that they stick to the regulations implemented by SEBI.
Market intermediaries consist of mutual funds, brokers, as well as portfolio managers.
2. Securities market regulation
SEBI supervises the Indian securities market to ensure that it functions openly and honestly.
It creates norms and guidelines for different types of market participants such as brokers, investors, and businesses.
3. Training and research
SEBI performs research while providing training courses to different types of market players such as market intermediaries, investors, and regulatory employees to promote a superior knowledge and comprehension of the Indian securities market.
Normally, the duties of SEBI consist of defending the interests of the investors, assuring the transparent and fair functioning of the securities market of India, establishing a regulatory-friendly environment for market players, as well as supporting market growth.
Structure of SEBI
There are 9 members on the Board of SEBI.
The Board happens to be a combination of the following:
1. One Chairman of the board who is appointed by the Indian Central Government.
2. Two Board members coming from the Union Ministry of Finance
3. One Board member who is appointed by the RBI.
4. Five Board members who are elected by the Indian Central Government.
Apart from providing the Board, the SEBI Chairman likewise oversees the departments of Vigilance, Communications, and Internal Inspection.
There is an executive director at the head of each department.
Their responsibility is to report to some particular whole-time members.
As many as four whole-time members are present in the organizational structure. Several departments are allocated to these members that they have to supervise.
SEBI’s organizational structure comprises in excess of 25 departments, including the Corporation Finance Department (CFD), Foreign Portfolio Investors and Custodians (FPI&C), Legal Affair Department, Department of Economic and Policy Analysis (DEPA-I, II, & III), Information Technology Department (ITD), Investment Management Department, Treasury and Accounts Divisions (T&A), as well as National Institute of Securities Market (NISM).
Powers of SEBI
The subsequent three primary powers are held by the SEBI w.r.t. to the capital market of India:
1. Quasi-Executive – to implement the judgments and regulations.
To inspect the Books of accounts in the event of any breach of the regulations. Apart from this, take action against the violators.
2. Quasi-Legislative – to frame regulations to safeguard the investors’ interests.
A few instances happen to be listing obligations, insider trading regulations, plus disclosure requirements.
3. Quasi-Judicial – To provide judgments on practices linked to unethical and fraudulent practices.