SEBI

Contents:

Define SEBI?
Where is the Headquarter of SEBI?
What are the functions of SEBI?
Why was SEBI formed?
Is the SEBI government body?
What are the objectives of SEBI?
What the powers of SEBI?
What are the differences between SEBI and RBI?

Define SEBI?

The Securities and Exchange Board of India (SEBI) was established on April twelve within the year 1992 in conjunction with the provisions of the Securities and Exchange Board of India Act in 1992. The Securities and Exchange Board of Bharat (SEBI) initially was established in 1988 as a non-statutory body for administering the exchange.

It then got regenerate into associate degree autonomous body on twelve April 1992 being given with accorded statutory powers, by the passing of the SEBI Act 1992 by the Indian Parliament. Terribly presently SEBI got planted because the regulator of capital markets in India was beneath a resolution of the govt. of India.

SEBI stands for Securities and Exchange Board of India

Where is the Headquarter of SEBI?

Its headquarters is located at the downtown of Bandra Kurla advanced in the metropolis and has Northern, Eastern, Southern, and Western Regional Offices meet in the national capital, Kolkata, Chennai, and Ahmedabad severally. SEBI additionally has opened native offices at Bangalore, Jaipur Guwahati, Bhubaneshwar, Kochi, Patna and Chandigarh throughout the year. 2013 - 2014. The controller of Capital problems was the administrative unit that came into existence before SEBI. Therefore we will say that SEBI has derived authority from the Capital problems (Control) Act of 1947.

The SEBI is managed by its members that consist of the following: The chairman is nominative by the Union Government of Bharat. Other 2 members i.e., Officers from the Union Finance Ministry and the member from the banking company of Bharat. The remaining 5 member’s area unit nominative by the Union Government of Bharat, out of them a minimum of 3 shall be whole-time members. Once the modification of the 1999 act, collective investment schemes were brought beneath SEBI except for investments like chittis, Nidhi funds, and cooperatives.

What are the functions of SEBI?

The Preamble of the Securities and Exchange Board of India (SEBI) describes the fundamental functions of the Securities and Exchange Board of India as "...to protect the interests of investors in securities and to push the event of, and to manage the exchange and for matters connected therewith or incidental thereto". SEBI must be attentive to the wants of 3 teams that represent the market, these are Area unit issuers of securities, Market intermediaries, and Investors.

SEBI has chiefly three functions registered into one body:

quasi-legislative,
quasi-judicial, and
quasi-executive.

The varied functions of SEBI are:

To defend the interests of investors in exchange
To promote the development of exchange
To regulate the business available exchanges and the other securities markets
To register and regulate the operating of stockbrokers, sub-brokers, share transfer agents, bankers to associate degree issue, trustees of trust deeds, registrars to associate degree issue, merchandiser bankers, underwriters, portfolio managers, investment advisers and such alternative intermediaries UN agency could also be related to securities markets in any manner.
To register and regulate the operating of the depositories, participants, custodians of securities, foreign institutional investors, credit rating agencies.
To register and regulate the operating of venture capital funds and collective investment schemes as well as mutual funds.
To promote and regulate self-regulatory organizations
To command fallacious and unfair trade practices regarding securities markets
To promote investors in education and coaching of intermediaries of securities markets.
To command trading in securities.
To regulate the substantial acquisition of shares and takeover of corporations and to conduct analysis for economic operating and development of the exchange. It drafts laws in its legislative capacity, it conducts investigation and social control action in its government to perform and it passes rulings and orders in its judicial capacity. Although this makes it terribly powerful, there's an associate degree charm method to form answerability. There’s a Securities proceedings judicature that could be a three-member judicature and is presently headed by Justice Tarun Agarwala, a former jurist of the Meghalaya court. A second charm lies on to the Supreme Court. SEBI has taken an awfully proactive role in streamlining revelation needs to international standards.

Why was SEBI formed?

With the expansion within the dealings of stock markets, the heap of malpractices additionally started available markets like worth rigging, the unofficial premium on new issues, and delay in delivery of shares, violation of rules, and laws of the securities market and listing needs came about. Due to these malpractices, the shoppers started losing confidence and religion within the securities market. Thus, the government of India determined to line up the center or restrictive body referred to as the Securities Exchange Board of India (SEBI).

Is the SEBI government body?

SEBI could be a statutory restrictive body that was established on the twelfth of April, 1992. It monitors and regulates the New Delhi and exchange whereas making certain to safeguard the interests of the investors formulating laws and pointers to be adhered to.

What are the objectives of SEBI?

The SEBI acts as a scrutinizer for all capital market contributors and its main function is to provide such territory for the financial experts that eventually results in a smooth and streamlined working platform of the securities market.

In order to make this happen, three main participants of the financial market are essential:

Issuers of securities: The Issuers of securities are units inside the corporate field that upraise funds from various provenances. The SEBI makes sure that they get a healthy atmosphere for their needs.
Investors: Investors are the ones who keep the market functioning and is also oversee of maintaining an environment that is free from malpractices.
Financial Intermediaries: And the Financial Intermediaries are the people who act as mediators between the issuers and investors and also ensure smooth and safe financial transactions.

Functions of SEBI can be categorized into three functions:

Protective Functions: The Protective functions stop inside trading so that there won’t be buying and selling inside the company. The SEBI has trusted lists of companies who can purchase their own shares from secondary markets. The directors, employees, and other head in charges will have the access to highly confidential information that affects the prices and securities, so in order to prevent insider trading the Protective functions plays a key role, also it promotes fair trade practices and prohibits fraudulent and unfair trade practices. SEBI also educates investors by conducting offline and online seminars so that investors get an idea of the financial market and money management.
Developmental Functions: Developmental functions the initiations took to upgrade the security market by the SEBI to upgrade the market security with the help of technological innovations. Introducing internet trading through genuine stockbrokers can help in providing large customer service and also widespread knowledge and acclaim can be gained through this. By introducing the DE mat format our certificates get converted from physical form to electronic form so as to increase their accessibility, also by training the mediators of the securities market the exchange and functions will be smooth and helpful.
Regulatory Functions: When we come to Regulatory functions, this is the 3rd and last function, the main function is to establish regulations for financial mediators and corporates to make sure that the market runs successfully and efficiently. The SEBI has framed some guidelines and codes of conduct that are enforced to financial mediators and corporates. These mediators have been placed under the private placement and have been made more restrictive.

What are the powers of SEBI?

SEBI has the power to regulate and sanction by-laws of stock exchanges, the book of accounts of recognized stock exchanges and calls for periodical returns are also viewed by the SEBI. Coming to higher functions the books of financial Intermediaries are also handled. When taking the outside functions SEBI forces certain companies to get listed on one or more stock exchanges and to handle registration of the brokers and mediators.

What are the differences between SEBI and RBI?

The Securities and Exchange Board of India (SEBI), is a regulatory body while the Reserve Bank of India (RBI) is the Central Bank of India.
The main functions of RBI are, the custody of foreign reserve, controller of credit and to manage printing and supply of currency notes in the whole country. Both of them play a key role in the Indian economy. While The main function of SEBI is to protect the investors in securities and to promote the development of and to regulate the securities market
RBI is the body responsible for maintaining banknotes all around the country, to keep currency reserves to maintain stability and to keep the credit and currency system working efficiently. SEBI, on the other hand, is an autonomous body to oversee the operations of investment markets in the country. The board then performs the function of a mediator to keep markets more stable and efficient markets.
The main motive of the government in setting up the SEBI was to protect the interests of investors in securities and to help in the growth of the securities market and so that it attracts foreign investors. In brief, the RBI is the central bank of India that works as a banker to banks and the government while SEBI is the securities and Exchange Board of India that looks after the health of investment markets.

These are the differences in the roles and responsibilities of these two organizations.