Securities and

Exchange Board of
India
 INTRODUCTION
• Securities and exchange Board of India (SEBI) was
first established in 12 April 1992. It became an
autonomous body by The Government of India on 12
May 1992 and given statutory powers in 1992 with
SEBI Act 1992 being passed by the Indian Parliament.
SEBI has its headquarters at the business district
of Bandra Kurla Complex in Mumbai.
• Controller of Capital Issues was the regulatory
authority before SEBI came into existence; it derived
authority from the Capital Issues Act, 1947.
 MANAGING MEMBERS
• The chairman who is nominated by the Union
Government of India.
• Two members, i.e., Officers from Union
Finance Ministry.
• One member from the Reserve Bank of India.
• The remaining five members are nominated by
the Union Government of India, out of them at
least three shall be whole-time members.
 MAJOR ACHIEVEMENTS
• SEBI is credited for quick movement towards
making the markets electronic and paperless by
introducing T+5 rolling cycle from July 2001 and
T+3 in April 2002 and further to T+2 in April 2003.
The rolling cycle of T+2 means, Settlement is done
in 2 days after Trade date.
• SEBI has increased the application limit for retail
investors to ₹ 2 lakh, from ₹ 1 lakh at present.
 PURPOSE AND 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
easy, fair and efficient manner.
 To the investors, it provides protection of
their rights and interests through accurate
and authentic information and disclosure
of information on a continuous basis.
 To the intermediaries,it should offer a
competitive , professionalised and expanding
market with adequate and efficient
infrastructure so that they are able to render
better service to the investors and issuers.
 REASONS FOR ESTABLISHMENT OF SEBI

• The capital market has witnessed a tremendous

growth during 1980’s, characterised particularly by
the increasing participation of the public. This ever
expanding investors population and market
capitalisation led to a variety of malpractices on the
part of companies, brokers, merchant bankers,
investment consultants and others involved in the
securities market. So, there was a need to establish
a regulatory body known as ‘Securities and
exchange board of India’.
 OBJECTIVES OF SEBI

• To regulate stock exchanges and the securities industry to

promote their orderly functioning.
• To protect the rights and interests of investors, particularly
individual investors and to guide and educate them.
• To prevent trading malpractices and achieve a balance
between self regulation by the securities industry and its
statutory regulation.
• To regulate and develop a code of conduct and fair practices
by intermediaries like brokers, merchant bankers etc., with a
view to making them competitive and professional.
• Controlling insider trading and takeover bids
and imposing penalties for such practices.
• undertaking inspection, conducting enquiries
and audits of stock exchanges and
intermediaries.
• Levying fee or other charges for carrying out
the purposes of the Act
 DEVELOPMENT FUNCTION
• Investor education
• Training of intermediaries
• Conducting research and publishing
information useful to all market participants
 PROTECTIVE FUNCTION
• Prohibition of fraudulent and unfair trade
practices like making misleading
statement,manuplation, price rigging etc.
• Contolling insider trading and imposing
penalties for such practices.
• Undertaking steps for investor protection.
• Promotion of fair practices and code of
conduct in securities market.
The SEBI also formed two advisory committees.
They are the Primary Market Advisory Committee
and the Secondary Market Advisory Committee.
These committees consist of the market players,
the investors associations
recognised by the SEBI and the eminent persons in
the capital market. They provide important inputs
to the SEBI’S policies. The objectives of the two
Committees are as follows: a. To advise SEBI on
matters relating to the regulation of intermediaries
for ensuring investors protection in the primary
market.
b. To advise SEBI on issues related to the
c. To advise SEBI on disclosure requirements
for companies. d. To advise for changes in legal
framework to introduce simplification and
transparency in the primary market. e. To
advice the board in matters relating to the
development and
regulation of the secondary market in the
country..