FMR Assignment

FINANCIAL MARKET
REGULATIONS
ASSIGNMENT TOPIC: SEBI (SECURITIES

&EXCHANGE BOARD OF INDIA)
SUBMITTED BY: ABHISHEK MARORIA
ROLL NO. 3406 SECTION: A
10TH SEMESTER
SUBMITTED TO: DR. RAM GOPAL

SEBI
Securities and Exchange Board of India (SEBI) is a statutory regulatory body

entrusted with the responsibility to regulate the Indian capital markets. It monitors
and regulates the securities market and protects the interests of the investors by
enforcing certain rules and regulations.
SEBI was founded on April 12, 1992, under the SEBI Act, 1992. Headquartered in
Mumbai, India, SEBI has regional offices in New Delhi, Chennai, Kolkata and
Ahmedabad along with other local regional offices across prominent cities in
India.
THE OBJECTIVES OF SEBI
is to ensure that the Indian capital market works in a systematic manner and
provide investors with a transparent environment for their investment. To put it
simply, the primary reason for setting up SEBI was to prevent malpractices in the
capital market of India and promote the development of the capital markets.
The main objectives of SEBI are:
(1)Regulation of Stock Exchanges:
The first objective of SEBI is to regulate stock exchanges so that efficient services
may be provided to all the parties operating there.
(2)Protection to the Investors:
The capital market is meaningless in the absence of the investors. Therefore, it is

important to protect the interests of the investors.
The protection of the interests of the investors means protecting them from the
wrong information given by the companies in their prospectus, reducing the risk of
delivery and payment, etc. Hence, the foremost objective of the SEBI is to provide
security to the investors.
(3)Checking the Insider Trading:
Insider trading means the buying and selling of securities by those people’s
directors Promoters, etc. who have some secret information about the company and
who wish to take advantage of this secret information.
This hurts the interests of the general investors. It was very essential to check this
tendency. Many steps have been taken to check inside trading through the medium
of the SEBI.
(4)Control over Brokers:
It is important to keep an eye on the activities of the brokers and other middlemen
in order to control the capital market. To have a control over them, it was
necessary to establish the SEBI.
(5)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.
(6)Establishing Balance:
SEBI has to maintain a balance between the statutory regulation and self-
regulation of the securities industry.
(7)Healthy environment:
SEBI has to maintain a balance between the people in the stock market by guiding
them to a healthy environment and protecting the money involved in the market.
(8)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.
(9)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.
(10)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.
Functions of SEBI:
SEBI primarily has three functions
1. Protective Function.
2. Regulatory Function.
3. Development Function.
1. Protective Functions
As the name suggests, these functions are performed by SEBI to protect the
interest of investors and other financial participants.
It includes-
• Checking price rigging

• Prevent insider trading
• Promote fair practices
• Create awareness among investors
• Prohibit fraudulent and unfair trade practices
2. Regulatory Functions
These functions are basically performed to keep a check on the functioning of the
financial markets.
• Designing guidelines and code of conduct for the proper functioning

of financial intermediaries and corporate.
• Regulation of takeover of companies
• Conducting inquiries and audit of exchanges
• Registration of brokers, sub-brokers, merchant bankers etc.
• Levying of fees
• Performing and exercising powers
• Register and regulate credit rating agency
3. Development Functions
SEBI performs certain development functions also that include but they are not
limited to-
• Imparting training to intermediaries
• Promotion of fair trading and reduction of malpractices
• Carry out research work
• Encouraging self-regulating organizations
• Buy-sell mutual funds directly from AMC through a broker
Powers of SEBI —
Quasi-judicial powers:
In cases of frauds and unethical practices pertaining to the securities market, SEBI
India has the power to pass judgements. The said power facilitates to maintain
transparency, accountability and fairness in the securities market.
Quasi-executive powers:
SEBI has the power toexamine the Book of Accounts and other vital documents to
identify or gather evidence against violations. If it finds one violating the
regulations, the regulatory body has the power to impose rules, pass judgements
and take legal actions against violators.
Quasi-Legislative powers:
To protect the interest of investors, the authoritative body has been entrusted with
the power to formulate suitable rules and regulations. Such rules tend to
encompass the listing obligations, insider trading regulations and essential
disclosure requirements. The body formulates such rules and regulation to get rid
of malpractices that are prevalent in the securities market.
There are also some other Powers of SEBI:
• When it comes to stock exchanges, SEBI has the power to regulate and
approve any laws related to functions in the stock exchanges.
• It has the powers to access the books of records and accounts for all the stock
exchanges and it can arrange for periodical checks and returns into the
workings of the stock exchanges.
• It can also conduct hearings and pass judgments if there are any malpractices
detected on the stock exchanges.
• When it comes to the treatment of companies, it has the power to get

companies listed and de-listed from any stock exchange in the country.
• It has the power to completely regulate all aspects of insider trading and
announce penalties and expulsions if a company is caught doing something
unethical.
• It can also make companies list their shares in more than one stock exchange
if they see that it will be beneficial to investors.
• Coming to investor protection, SEBI has the power to draft legal rules to
ensure the protection of the general public.
• It also has the power to regulate the registration of brokers and other
middlemen who will deal with investors in the market.

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FINANCIAL MARKET

ASSIGNMENT TOPIC: SEBI (SECURITIES

ROLL NO. 3406 SECTION: A

SUBMITTED TO: DR. RAM GOPAL

Securities and Exchange Board of India (SEBI) is a statutory regulatory body

THE OBJECTIVES OF SEBI

(1)Regulation of Stock Exchanges:

(2)Protection to the Investors:

The capital market is meaningless in the absence of the investors. Therefore, it is

(4)Control over Brokers:

(9)Promoting fair and proper functioning:

(10)Promoting fair and proper functioning:

SEBI primarily has three functions

• Checking price rigging

• Designing guidelines and code of conduct for the proper functioning

• Carry out research work

• Encouraging self-regulating organizations

• Buy-sell mutual funds directly from AMC through a broker

There are also some other Powers of SEBI:

• When it comes to the treatment of companies, it has the power to get

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