SECURITIES AND EXCHANGE

BOARD OF INDIA
Instructor
Course

INTRODUCTION

Securities and Exchange Board of India (SEBI) was

established by the Government of India in 1988
through an executive resolution, and later upgraded
as a fully autonomous body (a statutory Board) in
the year 1992 with the passing of the Securities and
Exchange Board of India Act (SEBI Act) on 30th
January 1992. In place of Government Control, a
statutory and autonomous regulatory board with
defined responsibilities, to cover both development
& regulation of the market, and independent powers
have been set up. Government decided to give it
statutory status after Securities Scam of 1990-91.

SEBIS HEADQUARTERS
SEBI Bhavan Bandra Kurla Complex, Bandra East,
Mumbai

OBJECTS OF THE SEBI ACT

To protect the interest of investors in securities.

To promote orderly and healthy growth of the securities market.

To ensure fair practices by the issuers of securities, namely companies.

To regulate securities market and other incidental matters.

To regulate and develop a code of conduct and fair practice and

monitor the activities of intermediaries like brokers, merchant bankers
etc.

To prohibit insider trading.

POWER AND FUNCTION OF SEBI

POWERS

Power to Inspect - Section 11(3)

Powers of Civil Court exercisable by SEBI Section 11(3)
Powers of SEBI where inquiry or investigation is
pending - Section 11(4)
Power relating prohibition and regulation of issue
of prospectus - Section 11(A)
Power to issue directions - Section 11(B)

POWER AND FUNCTION OF

SEBI
FUNCTIONS

Regulating the business in stock exchanges and any other

securities markets.
Registering and regulating the working of stock brokers,
sub-brokers, share transfer agents, bankers to an issue and
such other intermediaries who may be associated with
securities markets in any manner.
Registering and regulating the working of foreign
institutional investors, participants, depositories etc.
Prohibiting insider trading in securities.
Calling for information, undertaking inspection, conducting
inquiries etc.

PENALTIES AND ADJUDICATION

With Respect To The Mentioned Offences Penalty Stated

In The Act Is Rs. One Lakh For Each Day For Which The
Offence Continues Or Rs. One Crore Which Ever Is Less.

With Respect To The Offence, A Penalty Not Exceeding 5

Times The Amount For Which The Contract Note Was
Required To Be Issued By That Broker Is Given In The Act.

With respect to the offence, a penalty of one lakh rupees

or five time the amount of brokerage charged in excess
of the specified brokerage whichever is higher.

With respect to offences, a penalty of 25

crore rupees or three times the amount of
profits made out of insider trading,
whichever is higher.

With respect to offense, a penalty which

may extend to one crore rupees is
specified.

SECURITIES APPELLATE TRIBUNAL SECTION

15T

Section 15T empowers the central

government to establish securities appellate
tribunal by issuing notification in the official
gazette.
TIME LIMIT AND PROCEDURE FOR FILLING AN
APPEAL

Appeal shall be filled within 45 days of the order.

The appeal shall be made in 3 copies, with
additional copies for each additional respondent.
It must be signed by an authorized office.

MEANING OF INSIDER TRADING AND

PENALTIES

Insider Trading Is The Buying, Selling Or

Dealing In Securities Of A Listed Company
By A Director, Member Of Management,
Employee Of The Company, Or By Any
Other Person Such As Internal Auditor,
Advisor, Consultant, Analyst Etc WhoInside
Information Which Is Not Available To
General Public.

PENALTIES
Following penalties /punishments can be imposed
in case of violation of SEBI (Prohibition of Insider
Trading)Regulations , 1992
SEBI may impose a penalty of not Rs 25 Crores
or three times the amount of profit made out of
insider trading; whichever is higher
SEBI may initiate criminal prosecution
SEBI may issue orders declaring transactions in
securities based on unpublished price sensitive
information
SEBI may issue orders prohibiting an insider or
refraining an insider from dealing in the securities
of the company

THANK
YOU