SEBI – Full Details
1. What is SEBI?
SEBI (Securities and Exchange Board of India) is the regulator of the Indian securities and investment market.
It was established to protect investors, regulate the stock market, and ensure fair practices in all financial transactions related to securities.
2. When was SEBI formed?
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Established: 12 April 1988
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Given statutory powers: 30 January 1992 (through the SEBI Act, 1992)
3. Why was SEBI created?
Before SEBI, the Indian stock market had many issues:
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Price manipulation
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Insider trading
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Unfair practices
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No proper regulation
SEBI was created to make the markets transparent, safe, and efficient for investors.
4. Main Objectives of SEBI
a. Protect Investors
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Prevent fraud and unfair trade practices
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Ensure companies provide true financial information
b. Regulate the Securities Market
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Oversee stock exchanges
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Monitor stock brokers, mutual funds, merchant bankers, etc.
c. Develop the Market
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Introduce new products (like derivatives, ETFs)
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Improve market technology & systems
5. Functions of SEBI
1. Regulatory Functions
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Registration and regulation of market intermediaries
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Creating rules for stock exchanges
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Conducting inquiries and audits
2. Protective Functions
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Banning fraudulent trading
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Promoting investor education
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Monitoring insider trading
3. Development Functions
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Training programs for intermediaries
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Research and development
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Promoting fair and efficient markets
6. Powers of SEBI
SEBI has wide powers to maintain market discipline:
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Can inspect and investigate companies and brokers
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Can impose penalties
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Can ban trading in extreme cases
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Can regulate mutual funds and IPOs
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Can issue guidelines for listing and de-listing of companies
7. Structure of SEBI
SEBI consists of:
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One Chairman
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Two members from the Finance Ministry
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One member from the RBI
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Five other members appointed by the Central Government
(Chairperson names may change over time.)
8. Important Departments of SEBI
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Market Regulation Department
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Corporation Finance Department
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Investment Management Department
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Enforcement Department
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Legal Affairs Department
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Commodity Derivatives Market Regulation Department
9. SEBI Regulates:
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Stock exchanges (NSE, BSE, etc.)
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Listed companies
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Stock brokers
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Merchant bankers
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Mutual funds
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Portfolio managers
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Credit rating agencies
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Investment advisers
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Depositories (NSDL, CDSL)
10. Major Achievements of SEBI
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Introduced Demat accounts (paperless shares)
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Implemented T+3 → T+2 → T+1 settlement
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Made KYC mandatory
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Strengthened IPO rules
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Tightened regulations on insider trading
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Increased transparency in mutual funds
11. Laws Governed by SEBI
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SEBI Act, 1992
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Securities Contracts (Regulation) Act, 1956
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Depositories Act, 1996
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Companies Act (for listed companies)
12. SEBI for Investors
SEBI provides:
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SCORES – Online complaint redressal
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Investor awareness programs
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Protection against fraud