SEBI

What is SEBI?
Initially, SEBI acted as a watchdog and lacked the authority of controlling and
regulating the affairs of the Indian capital market. Nonetheless, in the year 1992,
it got the statutory status and became an autonomous body to control the
activities of the entire stock market of the country. The statutory status of the
SEBI authorized it to conduct the following activities:-
1. SEBI got the power of regulating and approving the by-laws of stock
exchanges.
2. It could inspect the accounting books of the recognized stock exchanges
in the country. It could also call for periodical returns from such stock
exchanges.
3. SEBI became empowered to inspect the books and records of financial
Intermediaries.
4. It could constrain companies for getting listed on any stock exchange.
5. It could also handle the registration of stockbrokers.
SEBI is headquartered in Mumbai and having its regional offices in New Delhi,
Chennai, Kolkata, and Ahmedabad. You can also find SEBI’s local offices in Jaipur,
Guwahati, Bangalore, Patna, Bhubaneswar, Chandigarh, and Kochi.
At present, 17 stock exchanges are currently operating in India, including NSE

and BSE. The operations of all these stock exchanges are regulated by the
guidelines of SEBI.
The organizational structure of

SEBI
Mr. Ajay Tyagi is the current chairman of SEBI. He was appointed on the 10th of
January, 2017 and took over the charge with effect from 1st March 2017 from
Mr. U.K. Sinha.
SEBI consists of one chairman and other board members. The honorable chairman
is nominated by the Central Government. Out of the eight board members, two
members are nominated by the Union Finance Ministry and one member is
nominated by the RBI. The rest five members of the board are nominated by the
Union Government.
The objectives of SEBI

SEBI’s responsibility is to ensure that the securities market in India functions in
an orderly manner. It is made to protect the interests of investors and traders in
the Indian stock market by providing a healthy environment in securities and to
promote the development of, and to regulate the equity market.
Further, as stated earlier, one of the prime reason for establishing SEBI was to
prevent malpractices in the Indian capital market.
SEBI’s main roles in the Indian

financial market
In order to achieve its objectives, SEBI takes care of the three most important
financial market participants.
— Issuer of securities. These are the companies listed in the stock exchange
which raise funds through the issue of shares. SEBI ensures that the issue of
IPOs and FPOs can take place in a transparent and healthy way.
— Players in the capital market i.e. the traders and investor. The capital
markets are functioning only because the traders exist. SEBI is responsible for
ensuring that the investors don’t become victims of any stock market
manipulation or fraud.
— Financial Intermediaries. They act as mediators in the securities market and

ensure that the stock market transactions take place in a smooth and secure
manner. SEBI monitors the activities of the stock market intermediaries like
brokers and sub-brokers.
The functions of SEBI

The SEBI carries out the following three key functions to perform its roles.
1. Protective Functions: SEBI performs these functions for protecting the
interests of the investors and financial institutions. Protective functions include
checking price rigging, prevention of insider trading, promoting fair practices,
creating awareness among investors and prohibition of fraudulent and unfair
trade practices.
2. Regulatory Functions: Through regulatory functions, SEBI monitors the

functioning of the financial market intermediaries. It designs the guidelines and
code of conduct for financial intermediaries and regulates mergers,
amalgamations, and takeovers takeover of companies.
SEBI also conducts inquiries and audit of stock exchanges. It acts as a registrar
for the brokers, sub-brokers, merchant bankers and many others. SEBI has the
power to levy fees on the capital market participants. Apart from controlling the
intermediaries, SEBI also regulates the credit rating agencies.
3. Development Functions: Among the list of SEBI’s development functions,

one of them is imparting training to intermediaries. SEBI promotes fair trading
and malpractices reduction. It also educates and makes investors aware of the
stock market by utilizing the funds available in capital markets.
Conclusion
The stock market is one of the most crucial indicators of a country’s economic
health. If people lose faith in the market, the number of participants will go
down. Furthermore, the country will also start losing FDIs and FIIs considerably
which will substantially hamper the country’s foreign exchange inflows.
Before SEBI was established many scams and malpractices took place in the
Indian stock market. One of the famous Indian stock market scams was “Harshad
Mehta scam.”
After SEBI came into power, stock market affairs started becoming healthier and
more transparent. Nonetheless, some securities mark scams have taken place
even after SEBI came into power. One famous such scam was “Ketan Parekh scam”
Although unfair activities do happen in the Indian capital market even as of

today, their frequency is quite less. Moreover, the security market statutes and
regulations are updated time and again. Therefore, day by day, SEBI is getting
more and more stringent with its authority.

SEBI

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SEBI

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What is SEBI?

At present, 17 stock exchanges are currently operating in India, including NSE

The organizational structure of

The objectives of SEBI

SEBI’s main roles in the Indian

— Financial Intermediaries. They act as mediators in the securities market and

The functions of SEBI

2. Regulatory Functions: Through regulatory functions, SEBI monitors the

3. Development Functions: Among the list of SEBI’s development functions,

Although unfair activities do happen in the Indian capital market even as of

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