INTRODUCTION

TITLE
SEBI: SECURITIES AND EXCHANGE
BOARD OF INDIA

SUBMITTED BY
KSHITIJ KATIYAR
CLASS: B.COM.LLB. (HONS)
SEMESTER: 4
OF
FACULTY OF LAW
DR. SHAKUNTALA MISRA NATIONAL REHABILATION
UNIVESITY
IN
APRIL, 2020

UNDER THE GUIDENCE OF

MRS. MALINI ARAGAL
OF
LAW FACULTY
DR. SHAKUNTALA MISRA NATIONAL REHABILATION
UNIVESITY

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 ANNEXURE

1.INTRODUCTION

2.ACKNOWLEDGEMENT

3.INDEX

4.CONTENT

5.BIBLIOGRAPHY

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 ACKNOWLEDGEMENT

I would like to express my special thanks and gratitude to my teacher

MRS. MALINI ARAGAL who gave the golden opportunity to do
this wonderful project on the topic SEBI: SECURITIES AND
EXCHANGE BOARD OF INDIA, which also helped me in doing
lots of research about the topic due to which, I came across various
new aspects about the topic. I am very much thankful to her.
Secondly I want to thank my parents and my friends who supported
me a lot and helped me in completing this assignment within limited
time frame.

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 INDEX
SR. PARTICULSRS PAGE
NUMBE NUMBE
R R
1 INTRODUCTON,HISTORY 5-6
&STRUCTURE OF SEBI

2 OBJECTIVE,FUNCTION&REPONSIBILIT 6-8
Y

3 SEBI GUIDELINES 8

4 POWERS OF SEBI 9

5 MAJOR ACHIEVEMENTS 10

6 SEBI AND OTHER REGIONAL 10-11

EXCHANGES

7 DEPARTMENTS OF SEBI 11-12

8 ADVANTAGES &LIMITATION 12-13

9 SEBI REFORMS 13

10 BIBLIOGRAPHY 14

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INTRODUCTION
The Securities and Exchange Board of India (SEBI) is the
regulator for the securities market in India owned by the
Government of India.
It was established in 1988 and given Statutory Powers on 30
January 1992 through the SEBI Act, 1992. SEBI plays an
important role in regulating all the players operating in the
Indian capital markets. It attempts to protect the interest of
investors and aims at developing the capital markets by
enforcing various rules and regulations.
HISTORY
Securities and Exchange Board of India (SEBI) was first
established in 1988 as a non-statutory body for regulating the
securities market. It became an autonomous body on 12 April
1992 and was accorded statutory powers with the passing of
the SEBI Act 1992 by the Indian Parliament. Soon SEBI was
constituted as the regulator of capital markets in India under a
resolution of the Government of India.
SEBI has its headquarters at the business district of Bandra
Kurla Complex in Mumbai and has Northern, Eastern,
Southern and Western Regional Offices in New Delhi,
Kolkata, Chennai, and Ahmedabad respectively.
It has opened local offices at Jaipur and Bangalore and has
also opened offices at Guwahati, Bhubaneshwar, Patna, Kochi
and Chandigarh in Financial Year 2013 - 2014.
STRUCTURE

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The SEBI is managed by its members, which consists of the
following:
 The chairman is nominated by the Union Government of
India.
 Two members, i.e., Officers from the 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
Ajay Tyagi was appointed chairman on 10 February 2017,
replacing U K Sinha,[3] and took charge of the chairman
office on 1 March 2017.
Objectives of SEBI
The objectives of SEBI are:

 Protection of investors: The primary objective of SEBI is

to protect the rights and interests of the people in the
stock market by guiding them to a healthy environment
and protecting the money involved in the market. 
 Prevention of malpractices: The main objective for the
formation of SEBI was to prevent fraud and malpractices
related to trading and to regulate the activities of the
stock exchange.
 Promoting fair and proper functioning: SEBI was
established to maintain the functioning of the capital
market and to promote functioning of the stock
exchange. They are ordered to keep eyes on the activities
of the financial intermediaries and regulate the securities
industry efficiently. 

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  Establishing Balance: SEBI has to maintain a balance
between the statutory regulation and self-regulation of
the securities industry.
 Establishing a code of conduct: SEBI is required to
develop and regulate a code of conduct to avoid frauds
and malpractices caused by intermediaries such as
brokers, underwriters and other people.

Functions and responsibilities:

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 there with or
incidental there to".
SEBI has to be responsive to the needs of three groups, which
constitute the market:

The Issuer of Securities 

Issuers are the group that works in the corporate department to
easily raise funds from the various sources of the market. So,
SEBI helps the issuers by providing them a healthy and open
environment to work efficiently. 

Investors 
The investors are the soul of the market as they keep the
market alive by providing accurate supplies, correct
information, and protection to the people on a daily basis.
SEBI helps investors by creating a malpractice free
environment to attract and protect the money of the people
who invested in the market. 

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Financial Intermediaries

The intermediaries are the people who act as middlemen

between the issuers and the investors. SEBI helps in creating a
competitive professional market which gives a better service
to the issuers and the investors. They also provide efficient
infrastructure and secured financial transactions

SEBI Guidelines for Issue of Securities:

SEBI has issued detailed guidelines in respect of issue of
securities to public. The guidelines were first issued on 11th
June, 1992 and were amended subsequently from time to
time. SEBI issued consolidated guidelines as SEBI
(Disclosure and Investor Protection) Guidelines, 2000 vide its
circular No. 1 dated 19-1-2000.
These guidelines were applicable to all public issues by listed
and unlisted companies, all offers for sale and rights issues by
listed companies whose equity share capital is listed, except in
case of rights issues where the aggregate value of securities
offered does not exceed Rs. 50 lacs.
Broadly, there are three methods for issuing securities to the
public:
(a) Conventional mode of receiving applications through
bankers,
(b) Book building, and
(c) On line system of stock exchange (e-IPO)

Power of SEBI

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For the discharge of its functions efficiently, SEBI has been
vested with the following powers:
i. Quasi-Judicial: SEBI has the authority to deliver
judgements related to fraud and other unethical practices in
terms of the securities market. This helps to ensure fairness,
transparency, and accountability in the securities market.
ii. Quasi-Executive: SEBI is empowered to implement the
regulations and judgements made and to take legal action
against the violators. It is also authorised to inspect Books of
accounts and other documents if it comes across any violation
of the regulations.
iii. Quasi-Legislative: SEBI reserves the right to frame rules
and regulations to protect the interests of the investors. Some
of its regulations consist of insider trading regulations, listing
obligation, and disclosure requirements. These have been
formulated to keep malpractices at bay.

OTHER POWERS ARE AS FOLLOWS:

 To approve by−laws of Securities exchanges.
 To require the Securities exchange to amend their
by−laws.
 Inspect the books of accounts and call for periodical
returns from recognised Securities exchanges.
 Inspect the books of accounts of financial intermediaries.
 Compel certain companies to list their shares in one or
more Securities exchanges.
 Registration of Brokers and sub-brokers

Major achievements:

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  SEBI has enjoyed success as a regulator by pushing
systematic reforms aggressively and successively. 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+2means, Settlement is done in 2 days after Trade
date.SEBI has been active in setting up the regulations as
required under law. SEBI did away with physical
certificates that were prone to postal delays, theft and
forgery, apart from making the settlement process slow
and cumbersome by passing Depositories Act, 1996.

 SEBI has also been instrumental in taking quick and

effective steps in light of the global meltdown and the
Satyam fiasco. In October 2011, it increased the extent
and quantity of disclosures to be made by Indian
corporate promoters. In light of the global meltdown, it
liberalised the takeover code to facilitate investments by
removing regulatory structures. In one such move, SEBI
has increased the application limit for retail investors to
₹ 2 lakh, from ₹ 1 lakh at present

SEBI and Regional Securities Exchanges:

SEBI in its circular dated May 30, 2012 gave exit - guidelines
for Securities exchanges. This was mainly due to illiquid
nature of trade on many of 20+ regional Securities exchanges.
It had asked many of these exchanges to either meet the
required criteria or take a graceful exit. SEBI's new norms for
Securities exchanges mandates that it should have minimum
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net-worth of Rs.100 crore and an annual trading of Rs.1,000
crore. The Indian Securities market regulator SEBI had given
the recognized Securities exchanges two years to comply or
exit the business

SEBI departments;
SEBI regulates Indian financial market through its 20
departments:
1. Commodity Derivatives Market Regulation Department
(CDMRD)
2. Corporation Finance Department (CFD)
3. Department of Economic and Policy Analysis (DEPA)
4. Department of Debt and Hybrid Securities (DDHS)
5. Enforcement Department – 1 (EFD1)
6. Enforcement Department – 2 (EFD2)
7. Enquiries and Adjudication Department (EAD)
8. General Services Department (GSD)
9. Human Resources Department (HRDM)
10. Information Technology Department (ITD)
11. Integrated Surveillance Department (ISD)
12. Investigations Department (IVD)
13. Investment Management Department (IMD)
14. Legal Affairs Department (LAD)
15. Market Intermediaries Regulation and Supervision
Department (MIRSD)
16. Market Regulation Department (MRD)
17. Office of International Affairs (OIA)
18. Office of Investor Assistance and Education (OIAE)
19. Office of the Chairman (OCH)

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 20. Regional offices (ROs)

Advantages of SEBI:
 Generally higher interest rates than those of other fixed-
income instruments, like certificates of deposit and U.S.
Treasury securities. A dependable source of attractive
income, paid either monthly or semi-annually, that you
can spend for current expenses or reinvest for future
needs.

 Relative protection of principal, subject to credit quality,

assuming you hold the securities until maturity. Diversity
of choice among issuers, maturity dates and quality
ratings, increasing your flexibility to meet a broad range
of investment objectives

Limitations of SEBI:
Though SEBI has started as a watchdog in protecting
investors’ interests, regulating the working of Stock
Exchanges and promoting capital market, still it faces a
number of problems in its working.

Some of these limitations are as follows:

i. The Central Government has authorised SEBI to frame its
rules and regulations for actively monitoring capital markets.

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These rules and regulations will have to be approved by the
government first. This will cause unnecessary delays and
interference by the Finance Ministry.
The bureaucratic delays in clearing the rules will hamper the
working of SEBI. The government should direct SEBI to
frame or change the rules as per the demand of the situation so
that it is able to achieve professional efficiency.
ii. SEBI will have to seek prior approval for filing criminal
complaints for violations of the regulations. This will again
cause delays at government level.
iii. SEBI has not been given autonomy. Its Board of Directors
is dominated by government nominees. The Chairman of the
Board has no fixed tenure and can be sacked with three
months’ notice. These appointments should be for a fixed
tenure to regulate the SEBI’s working in the long run.

SEBI REFORMS:
 The stock exchange scam of 1992 (Harshad Mehta) &
the scam of 2000(Ketan Parekh) led to various measures
by the government to protect the interest of the small
investors.
 SEBI introduced reforms like improved transparency,
digitalisation, enactment against insider walling,
restriction on forward trading, introduction of T+2
system of settlement (settlement within two days of trade
date) etc.

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  Enforces corporate disclosure.
 Force ban on insider trading (using corporation or stock
exchange vital information for his/her own interest).
 Protects retail investors
 Empowered to register or regulate mutual funds.
 Introducing a code of conduct for all credit rating
agencies operating in India.
 Mandatory to have anchor investors.

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 BIBLIOGRAPHY

WEBSITES:
 WWW.UNACADAMY.COM
 WWW.MBAEXAMNOTES.COM

BOOKS:
 FINANCIAL INSTITUTINS AND
MARKETS
- SHASHA K. GUPTA
NISHA AGGARWAL
NEETI GUPTA

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