What is SEBI?

Describe the functions & responsibilities

of SEBI?
SEBI
The Securities and Exchange Board of India (SEBI) is the designated regulatory
body for the finance and investment markets in India. The board plays a vital role in
maintaining stable and efficient financial and investment markets by creating and
enforcing effective regulation in India's financial marketplace. India's SEBI is similar
to the U.S. Securities and Exchange Commission (SEC).

The SEBI was established in 1988 but was only given regulatory powers on April 12,
1992, through the Securities and Exchange Board of India Act, 1992. It plays a key
role in ensuring the stability of the financial markets in India, by attracting foreign
investors and protecting Indian investors. SEBI was built by the government of India.
Its headquarters is located at the Bandra Kurla Complex Business District found in
Mumbai. It also has northern, eastern, southern and western regional offices.

SEBI's management is composed of its own members. Its management team

consists of a chairman nominated by the Union Government of India, two members
who are officers from the Union Finance Ministry, one member from the Reserve
Bank of India and five other members who are also nominated by the Union
Government of India.

Objectives of SEBI
The preamble of SEBI Act, 1992 states its objectives as;

An Act to provide for the establishment of a Board to protect the interests of

investors in securities and to promote the development of, and to regulate, the
securities market and for matters connected therewith or incidental thereto.
The primary objective of SEBI is to promote healthy and orderly growth of the
securities market and secure investor protection. However, other objectives of
SEBI can be categorized as:-

1. Ensuring fair practices in securities market.

2. Promoting efficient, competitive and professional services by merchant
bankers, brokers, advisors, underwriters, port folio managers and other
intermediaries.
3. Formulate rules and regulations for the securities market in India.
4. Settlement of investors grievances in securities market.

Functions and Responsibilities

SEBI's Preamble describes in detail the functions and powers of the board. Its Preamble
states that SEBI must "protect the interests of investors in securities and to promote the
development of, and to regulate the securities market and for matters connected there
with or incidental there to." In this light, as a board, SEBI must be responsive and
proactive to the needs and interest of the groups that constitute India's financial and
investment markets: the investors, the market intermediaries and the issuers of
securities.

SEBI is allowed to approve by-laws of stock exchanges. It is its job to require the stock
exchange to follow its by-laws. SEBI also inspects the books of accounts of financial
intermediaries and asks for regular returns from recognized stock exchanges. SEBI's
role covers compelling particular companies to list their shares in stock exchanges.
Aside from these, SEBI is tasked to manage the registration of brokers.

Ultimately, the board has three powers: quasi-judicial, quasi-legislative and quasi-
executive. SEBI has the right to draft regulations under its legislative capacity, conduct
investigations and impose action under its executive function, and pass new rules and
orders under its judicial capacity. Despite these powers, the results of SEBI's functions
still have to go through the Securities Appellate Tribunal and the Supreme Court of
India.

Regulatory Functions
Inspecting books and accounts of financial intermediaries.
Monitor and check share trading in securities market.
Registration and regulation of brokers, advisors, underwriters, merchant
bankers, portfolio managers and other intermediaries.
Registration and regulation of Mutual Funds, Venture Capital Funds and
Collective Investment Schemes.
Prohibiting unfair, fraudulent and illegal practices in securities market.
Prohibiting insider trading through Stock Watch System and by imposing
penalties.
Regulating substantial acquisition of shares and takeovers.
 Promotion of fair practices in securities market.
Promoting Investor education and professional training of intermediaries.
Promotion of self regulatory organizations.
Publishing informative research useful to all participants.