SECURITIES AND EXCHANGE BOARD OF INDIA - SEBI

SECURITIES AND EXCHANGE BOARD OF INDIA (SEBI)

What is SEBI?

The Securities and Exchange Board of India (Sebi) is a statutory regulatory body established by the Government of India in 1992 to regulate the securities market in India and protect the interests of investors in securities.

SEBI has the power to regulate and perform functions such as check the books of accounts of stock exchanges and call for periodical returns, approve by-laws of stock exchanges, , inspect the books of financial intermediaries such as banks, compel certain companies to get listed on one or more stock exchanges, and handle the registration of brokers.

What is the purpose of SEBI?

SEBI was established to keep a check on unfair and malpractices and protect the investors from such malpractices. The organization was created to meet the requirements of the following three groups:

· Issuers: SEBI works toward providing a marketplace to the investors where they can efficiently and fairly raise their funds.

· Intermediaries: SEBI works towards providing a professional and competitive market to the intermediaries 

· Investors: SEBI protects and supplies accurate information to investors.

Objectives of SEBI

The fundamental objective of SEBI is to safeguard the interest of all the parties involved in trading. It also regulates the functioning of the stock market. SEBI’s objectives are:

· To monitor the activities of the stock exchange.

· To safeguard the rights of the investors

· To curb fraudulent practices by maintaining a balance between statutory regulations and self-regulation.

· To define the code of conduct for the brokers, underwriters, and other intermediaries. 

Functions of SEBI

SEBI carries out the following tasks to meet its objectives: Protective functions, Regulatory functions, and developmental functions. Functions that SEBI performs as a part of its protective functions are:

· It checks price manipulation

· It bans Insider trading

· It prohibits unfair and fraudulent trade practices

· It promotes fair code of conduct in the security market

· It takes efforts to educate the investors regarding ways to evaluate the investment options better

As a part of its regulatory functions, SEBI performs the following role:

· It has designed a code of conduct, rules, and regulations to regulate the brokers, underwriters, and other intermediaries.

· SEBI also governs a company’s takeover.

· It regulates and registers the workings of share transfer agents, stockbrokers, merchant bankers, trustees, and others who are linked with the stock exchange.

· It regulates and registers the mutual funds as well.

· It conducts audits and inquiries of stock exchanges.

As a part of its developmental functions, SEBI performs the following role:

· It facilitates the training of the intermediaries.

· It aims at promoting activities of the stock exchange by having an adoptable and  flexible approach.