The Securities Presented By:

And Exchange Navanshi Amin

Sejoti Banik

Board Of India Shwetakshi Rajgarhia

Yashodhara Khadiya

(SEBI)
Introduction
– The Securities and Exchange Board of India (SEBI) is a regulatory body of the
Indian financial and investment markets.
– A very important role is played by SEBI which ensures that stability is maintained
in the Indian investment market role which is done by attracting foreign investors
and protecting Indian investors and by effective regulation in the marketplace.
The basic objectives of the Board were identified as:
 To protect the interests of investors in securities 
 To promote the development of Securities Market 
 To regulate the securities market and
 For matters connected therewith or incidental there to.
 A chairperson
nominated by Union
Government of India

Two members
nominated Union
Members of Five members Also
nominated by Union
Finance Ministry SEBI Government Of India

One member from

the Reserve Bank of
India
History
– Replaced Controller of – In April,1992 regulatory
Capital Issues. powers were given through
SEBI’s Act.

– Established in 1988 as a
– Statutory power was given
non Statutory Body.
by an amendment in SEBI’s
Act in 1992.
FUNCTIONS OF SEBI

Protective Developmen Regulatory

Functions tal Functions Functions
Protective Functions
– Checks price rigging
– Prevents Insider Trading
– Prohibits fraudulent and unfair trade practices
– Educating its investors
Promoting training of intermediaries in securities market
Promoting activities of stock exchange
a) Allows internet trading
b) Made underwriting optional to reduce the cost of issue

Developmental functions
Regulatory Functions
– Framing the rules and
regulations.
– Registers and regulates the
working of stock brokers, sub-
brokers, share transfer agents,
trustees, merchant bankers
– Registers and regulates the
working of mutual funds
– Regulates takeover of the
companies
– Conducts inquiries and audit of
stock exchanges
Controversies
– Public Interest Litigation (PIL) filed by India Rejuvenation Initiative
– On 21 November 2011, the court asked the petitioners to file a
new PIL with constitutional changes
– The Chief Justice of India refused the finance ministry’s request to
dismiss the PIL 
– Dr. KM Abraham pointed out some major problems in the
organization.
 Case
Studies
Harshad Mehta Scam
– Also known as Stock Market Scam
which was the biggest scam in 90’s
– Harshad Mehta’s annual income
was approximately 8 Billion dollars.
– The whole scam was approximately
of Rs.4999 Crores
– Had the capability to Drive up a
shares price by 4400%
List of Changes by SEBI
 Full disclosure Norms were introduced.
 The Listing Agreement was introduced and adherence to it.
 A code of advertisement was introduced at the time of making a public
offer for purchase of securities.
 NSC and BSC switched to electronic trading for operations.
 A revised “carry forward” system replaced the “badla” system.
 The procedure for public offerings and guidelines were tightened.
– The Satyam Scandal came to light on 7th January, 2009 by way of a
confession letter written by B. Ramalinga Raju. He states the following
estimates:
Satyam
– Overstating assets by Rs. 2161 Crores.
– understating liabilities by Rs. 1020 Crores
Scam
– Nonexistent interest worth Rs. 376 Crores.
– Inflating cash reserves by Rs. 5040 Crores.
– Loans worth Rs. 2000 Crores from nonbanking financial companies
(NBFC’s).
– The whole scam cost the markets approximately Rs. 14, 000 Crores.
– SEBI ordered the 10 accused to pay Rs. 1850 Crores + 12% simple
interest (roughly amounting to Rs.3000 Crores) within 45 days
– Banned any of them from accessing the securities markets in any way
for 14 years.
List Of Changes by SEBI
– Regular monitoring of all
transactions between investors,
shareholders, brokers and the
company.
– Special attention to large and
unusual transactions.
– Appointment of the Chief Financial
Officer (CFO) by the Audit
Committee after proper assessment.
– Adoption of the International
Financial Reporting Standards
(IFRS).
– Interim Disclosure of balance sheet
figures on a half yearly basis.
– Strict timelines for the submission
of various financial reports to SEBI
SAHARA SCAM
– The government gave SEBI the power to regulate any money
pooling worth Rs.100 Crores or more.
– The authority to cease the assets of the people who do not comply
List Of
with the “seize and search”.
– The government has instructed SEBI to create a new law to
Changes
control illicit investment schemes.
– SEBI now has the right to retrieve and investigate the telephone
by SEBI
records.
– Chit funds, Nidhi schemes and housing schemes now have a
corpus greater than Rs.100 Crores have to be regulated by SEBI
and follow all regulations as deemed fit by SEBI.
Conclusion
– SEBI is a very important body as far as Indian economy is concerned. This board
was formed for the flexibility and transparency of the financial transactions.
– SEBI has been established because of the increase in malpractices in the market
such as price rigging, delay in delivery of shares, violation of rules and
procedure of stock exchange. So, customer started losing faith and the
government decided to set up a regulatory body.
– The primary focus was to protect the interest of the investors and to resolve the
market issues. Through this report we have tried to analyse the function and
responsibilities of SEBI.
 References
– http://www.yourarticlelibrary.com/education/sebi-the-purpose-objective-and-functions-of-sebi/8762
– http://racolblegal.com/role-and-functions-of-sebi/
– https://caknowledge.com/sebi-overview-history-powers-functions-responsibilities/
– https://www.investopedia.com/terms/s/sebi.asp?ad=dirN&qo=investopediaSiteSearch&qsrc=0&o=40186
– https://www.investopedia.com/terms/s/sebi.asp#ixzz54eBA0trS
– http://legalmoksha.blogspot.in/2013/07/sebi-introduction-objectives-and.html
– http://ijldai.thelawbrigade.com/wp-content/uploads/2015/07/simran-chandok.pdf
– https://www.youtube.com/watch?v=mM39t2qbAAY
– https://www.scribd.com/document/87201140/Case-Study-of-Sebi-and-Sahara
– https://www.slideshare.net/Svasani/sahara-vs-sebi-case-analysis-9law-poi
– https://en.wikipedia.org/w/index.php?title=Securities_and_Exchange_Board_of_India&oldid=821614559
– https://www.sebi.gov.in/
Thank You