Main role of SEBI is to take care of three main entities of Indian financial market viz.

1. Security issuer
2. Intermediary
3. Investor
It achieves its objective by enforcing bye-laws and dividing its energy into three
functions viz.

1. Protective functions
2. Developmental functions
3. Regulatory functions
SEBI has also ceated a platform called SCORES to listen investor grievances.

1. Functions of SEBI • The SEBI performs functions to meet its objectives. •

Functions can be broadly divided into: • Protective functions • Developmental
functions • Regulatory functions 15

2. Functions of SEBI (Contd…) • Protective Functions•

It Checks Price Rigging

It Prohibits Insider trading
SEBI prohibits fraudulent and Unfair Trade Practices
SEBI undertakes steps to educate investors
SEBI promotes fair practices and code of conduct in security market

3. Developmental Functions
• SEBI promotes training of intermediaries of the securities market.
• SEBI tries to promote activities of stock exchange by adopting flexible and
adoptable approach in following way:
• SEBI has permitted internet trading through registered stock brokers.
• SEBI has made underwriting optional to reduce the cost of issue.
• Even initial public offer of primary market is permitted through stock exc
hange.

4. • Regulatory Functions
• It has framed rules and regulations and a code of conduct to regulate the
intermediaries such as merchant bankers, brokers, underwriters, etc.
• It registers and regulates the working of all those who are associated with
stock exchange in any manner.
• It registers and regulates the working of mutual funds etc.
• It regulates takeover of the companies.
• It conducts inquiries and audit of stock exchanges.