Presentation on: Securities and Exchange Board of India (SEBI) i anda wfayfa sik fafa até Securities and Exchange Board of IndiaCONTENTS Establishment * Organization’s Structure * Reasons For Establishment * Objectives of SEBI ¢ Functions of SEBI * Powers of SEBI ¢ Various Departments & their functions ¢ SEBI & Central Government * Satyam CaseESTABLISHMENT In 1988 the Securities and Exchange Board of India (SEBI) was established by the Government of India through an executive resolution, and was subsequently 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. PREAMBLE The Preamble of the Securities and Exchange Board of India describes the basic functions of the Securities and Exchange Board of India as “,...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”REASON FOR THE ESTABLISHMENT OF SEBI The capital market had witnessed a tremendous growth during the 1980s This ever expanding investor population and market capitalization led to a variety of malpractices.These malpractices include rigging of prices, unofficial premium on new issues, violation of rules and regulations, delay in delivery of shares etc. So, the Government of India decided to set-up a separate regulatory body known as SEBI.ORGANIZATION’S STRUCTURE Management of the Board The Board shall consist of the following members, namely:- a Chairman Two members, One from amongst the officials of the Ministry of the Central Government dealing with Finance and second from administration of the Companies Act, 1956. One member from amongst the officials of the Reserve Bank of India. Five other members of whom at least three shall be the whole-time members to be appointed by the central Government .Cael a Toy department LETC management department Secondary Tri cad department TELaLehaolar-]} Tals departmentPrimary Market Department: It deals with all policy matters and regulatory issues relating to primary market. Issue Management and Intermediaries Departments: This department is concerned with inspection of offer documents and other things like registration, regulation and monitoring of issue related to intermediaries.Secondary Market Department: It looks after all the policy and regulatory issues for the secondary market; administration of the major stock exchanges and other matters related to it. dnstitutional Investment Department: It concerned with framing policy for foreign institutional investors.ROLE OF SEBI To the issuers- it aims to provide a market place in which they can confidently look forward to raising finances they need in an easy, fair and efficient manner. To the inv stors- it should provide protection of their rights and interests through adequate, accurate and authentic information and disclosure of information on a continuous basis. To the intermediaries- it should offer a competitive, professionalized and expanding market with adequate and efficient infrastructure so that they are able to render better service to the investors and issuers.OBJECTIVES OF SEBI The primary objective of SEBI is to promote healthy and orderly growth -of the securities market and secure investor protection. The objectives of SEBI are as follows: To protect the interest of investors, so that, there is a steady flow of savings into the capital market. To regulate the securities market and ensure fair practices. To promote efficient services by brokers, merchant bankers, and other intermediaries, so that, they become competitive and professional.FUNCTIONS OF SEBI The SEBI Act, 1992 has entrusted with two functions, they are Regulatory functions And Developmental functions14 REGULATORY FUNCTIONS Regulation of stock exchange and self regulatory organizations. Registration and regulation of stock brokers, sub-brokers, Registrars to all issues, merchant bankers, underwriters, portfolio managers etc. Registration and regulation of the working of collective investment schemes including mutual funds. Prohibition of fraudulent and unfair trade practices relating to securities market. Prohibition of insider trading Regulating substantial acquisition of shares and takeover of companies.15 DEVELOPMENTAL FUNCTIONS Promoting investor’s education Training of intermediaries Conducting research and publishing information useful to all market participants. Promotion of fair practices Promotion of self regulatory organizations16 POWERS OF SEBI Power to call periodical returns from recognized stock exchanges. Power to compel listing of securities by public companies. Power to levy fees or other charges for carrying out the purposes of regulation. Power to call information or explanation from recognized stock exchanges or their members. Power to grant approval to bye-laws of recognized stock exchanges.af POWERS OF SEBI CONTINUE.. Power to control and regulate stock exchanges. Power to direct enquiries to be made in relation to affairs of stock exchanges or their members. Power to make or amend bye-laws of recognized stock exchanges. Power to grant registration to market intermediaries. Power to declare applicability of Section 17 of the Securities Contract (Regulation) Act 1956, in any State or area, to grant licenses to dealers in securities.18 nv VARIOUS DEPARTMENTS UNDER SEBI MARKET INTERMEDIARIES REGULATION AND. SUPERVISION DEPARTMENT (MIRSD) DERIVATIVES AND NEW PRODUCTS DEPARTMENT (DNPD) INVESTMENT MANAGEMENT DEPARTMENT (IMD) INVESTIGATIONS DEPARTMENT (IVD) LEGAL AFFAIRS DEPARTMENT (LAD) OFFICE OF INVESTOR ASSISTANCE & EDUCATION (OIAE) DEPARTMENT OF ECONOMIC & POLICY ANALYSIS. (DEPA) INFORMATION TECHNOLOGY DEPARTMENT (ITD)19 VARIOUS DEPARTMENTS UNDER SEB! CONTINUE... MARKET REGULATION DEPARTMENT (MRD) CORPORATION FINANCE DEPARTMENT (CFD) INTEGRATED SURVEILLANCE DEPARTMENT (ISD) ENFORCEMENT OF DEPARTMENT (EFD) ENQUIRIES & ADJUDICATION DEPARTMENT (EAD) GENERAL SERVICES DEPARTMENT (GSD) OFFICE OF THE CHAIRMEN (OCH) THE REGIONAL OFFICES (RO’s)SEBI & CENTRAL GOVT. The Central Government has power to issue directions to SEBI Board, supersede the Board, if necessary and to call for returns and reports as and when necessary. The Central Government has also power to give any guideline or to make regulations and rules for SEBI and its operations. The activities of SEBI are financed by grants from Central Government, in addition to fees, charges etc. collected by SEBI. The fund called SEBI General Fund is set up, to which, all fees, charges and grants are credited. This fund is used to meet the expenses of the Board and to pay salary of staff and members of the body.SEBI’S ROLE IN SATYAM SCAM M/s Satyam Computer Services Limited caused loss to the investors to the tune of Rs. 14,162 crore. The company head, Ramalinga Raju and members of his family secured illegal gains by various tricks. The sebi team worked for 45 days and filed the chargesheet against the accused for cheating, and falsification of accounts.