by SEBI is the primary regulatory body for the securities market in India. It regulates and supervises the activities of stock exchanges, brokers, and other market intermediaries. SEBI is responsible for enforcing regulations to protect the interests of investors and maintain market integrity.
History
The Securities and Exchange Board of India (SEBI) was established on April 12, 1992, as an independent statutory regulatory body under the Securities and Exchange Board of India Act, 1992. Prior to the establishment of SEBI, the regulation of the securities market was the responsibility of the Controller of Capital Issues, which was part of the Ministry of Finance.
The establishment of SEBI was a major milestone in the development of India’s securities market. Its primary objective was to promote the development of a transparent, efficient, and integrated securities market in India. The establishment of SEBI was also part of the economic liberalization and financial sector reforms that were initiated in India in the early 1990s.
SEBI was given wide-ranging powers to regulate and supervise the securities market in India. These powers included the ability to register and regulate stockbrokers, sub-brokers, portfolio managers, and other market intermediaries. SEBI was also given the power to regulate and supervise the activities of stock exchanges and other self-regulatory organizations.
Over the years, SEBI has played a crucial role in the development of India’s securities market. It has introduced several reforms and initiatives to improve transparency, promote investor protection, and enhance market efficiency. Some of the key initiatives introduced by SEBI include the introduction of online trading, dematerialization of securities, and the introduction of the Know Your Customer (KYC) norms for investors.
SEBI Roles
- Regulating and supervising the activities of stock exchanges, brokers, and other market intermediaries: SEBI ensures that these entities comply with regulatory guidelines and operate in a transparent and fair manner. It also monitors their activities to ensure that they are not engaged in any illegal or unethical practices.
- Protecting the interests of investors: SEBI enforces regulations to protect the interests of investors in the securities market. It ensures that investors receive timely and accurate information about companies and their securities, and takes action against any fraudulent or unfair practices.
- Promoting the development of the securities market: SEBI takes steps to promote the development of a transparent, efficient, and integrated securities market in India. This includes introducing new products and instruments, and creating a conducive regulatory environment for the growth of the market.
- Educating and creating awareness among investors: SEBI aims to educate investors about the securities market and create awareness about the risks and opportunities involved in investing. It also provides investors with the necessary tools and resources to make informed investment decisions.
- Enforcing rules and regulations: SEBI has the power to investigate and prosecute any violations of securities laws and regulations. It can impose fines and penalties on entities that violate these laws, and take legal action against them if necessary.
SEBI Functions
- Registration and regulation of market intermediaries: SEBI registers and regulates various market intermediaries such as stockbrokers, sub-brokers, portfolio managers, investment advisers, and mutual funds. It sets standards for their conduct, operations, and disclosures, and takes action against those who violate the rules.
- Supervision and monitoring of market activities: SEBI monitors and supervises the activities of stock exchanges, depositories, and other self-regulatory organizations. It ensures that they operate in a fair, transparent, and efficient manner, and that their activities are consistent with regulatory guidelines.
- Promoting investor protection: SEBI takes various measures to protect the interests of investors in the securities market. It requires companies to disclose important information to investors, such as financial statements and other disclosures. It also takes action against fraudulent and unfair practices, such as insider trading and market manipulation.
- Promoting market development: SEBI takes steps to promote the development of the securities market in India. It introduces new products and instruments, and creates a conducive regulatory environment for the growth of the market. It also works to attract more foreign investment into the market.
- Conducting research and education: SEBI conducts research on various aspects of the securities market and provides education to investors and market participants. It publishes reports and guidelines on various topics related to the securities market, and conducts training programs and workshops for investors and market participants.
