The 

Securities and Exchange Board of India (frequently abbreviated SEBI) is the regulator for

the securities market in India. It was formed officially by the Government of India in 1992 withSEBI Act
1992[2] being passed by the Indian Parliament. SEBI is headquartered in the popular business district
of Bandra-Kurla complex in Mumbai, and has Northern, Eastern, Southern and Western regional offices
in New Delhi, Kolkata, Chennai and Ahmedabad.

Controller of Capital Issues was the regulatory authority before SEBI came into existence[3]; it derived
authority from the Capital Issues (Control) Act, 1947.

INTRODUCTION == Organization structure == Upendra Kumar Sinha is the new chairman of SEBI. His
term started on February 18 2011. he is appointed for a period of five years.[4] .

The Board comprises[5]

Name Designation

Upendra Kumar Sinha Chairman

M. S. Sahoo Whole-Time Member

Dr K.M. Abraham Whole Time Member

Prashant Saran Whole Time Member

CA. T. V. Mohandas
Director, Infosys
Pai

Dr. Thomas Mathew Joint Secretary, Ministry of Finance

V. K. Jairath Member Appointed

List of former Chairmen[6]:

Name From To
 February 18,
C. B. Bhave February 18 2011
2008

February 18,
Shri M.. Damodaran February 18, 2008
2005

February 20,
Shri G. N. Bajpai February 18, 2005
2002

February 21,
Shri D. R. Mehta February 20, 2002
1995

Shri S. S. Nadkarni January 17, 1994 January 31, 1995

Shri G. V.
August 24, 1990 January 17, 1994
Ramakrishna

Dr. S. A. Dave April 12, 1988 August 23, 1990

Functions and responsibilities

SEBI has to be responsive to the needs of three groups, which constitute the market:

 the issuers of securities

 the investors
 the market intermediaries.

SEBI has three functions rolled into one body: quasi-legislative, quasi-judicial and quasi-executive. It
drafts regulations in its legislative capacity, it conducts investigation and enforcement action in its
executive function and it passes rulings and orders in its judicial capacity. Though this makes it very
powerful, there is an appeals process to create accountability. There is a Securities Appellate Tribunal
which is a three-member tribunal and is presently headed by a former Chief Justice of a High court - Mr.
Justice NK Sodhi. A second appeal lies directly to the Supreme Court.

SEBI has enjoyed success as a regulator by pushing systemic reforms aggressively and successively
(e.g. the quick movement towards making the markets electronic and paperless rolling settlement on T+2
basis). SEBI has been active in setting up the regulations as required under law.
SEBI has also been instrumental in taking quick and effective steps in light of the global meltdown and the
Satyam fiasco. It had increased the extent and quantity of disclosures to be made by Indian corporate
promoters. More recently, in light of the global meltdown, it liberalised the takeover code to facilitate
investments by removing regulatory strictures. In one such move, SEBI has increased the application limit
for retail investors to Rs 2 lakh, from Rs 1 lakh at present.

Powers
SEBI has the right to search and seizure where just cause can be given. In matters of security trading,
SEBI has the power to restrict and allow trading in a given scrip without any external (i.e. judicial or
executive) intervention.

Role of SEBI in Indian Capital Market

SEBI is regulator to control Indian capital market. Since its establishment in 1992, it is doing hard
work for protecting the interests of Indian investors. SEBI gets education from past cheating with
naive investors of India. Now, SEBI is more strict with those who commit frauds in capital market. 
The role of security exchange board of India (SEBI) in regulating Indian capital market is very
important because government of India can only open or take decision to open new stock exchange in
India after getting advice from SEBI.

If SEBI thinks that it will be against its rules and regulations, SEBI can ban on any stock exchange to
trade in shares and stocks.

Now, we explain role of SEBI in regulating Indian Capital Market more deeply with following points:

1. Power to make rules for controlling stock exchange :

SEBI has power to make new rules for controlling stock exchange in India. For example, SEBI fixed
the time of trading 9 AM and 5 PM in stock market. 

2. To provide license to dealers and brokers:

SEBI has power to provide license to dealers and brokers of capital market. If SEBI sees that any
financial product is of capital nature, then SEBI can also control to that product and its dealers. One of
main example is ULIPs case. SEBI said, “It is just like fund sand all banks and financial and insurance
companies who want to issue it, must take permission from SEBI."

3. To Stop fraud in Capital Market:

SEBI has many powers for stopping fraud in capital market.

It can ban on the trading of those brokers who are involved in fraudulent and unfair trade practices
relating to stock market. 

 It can impose the penalties on capital market intermediaries if they involve in insider trading. 

4. To Control the Merge, Acquisition and Takeover the companies:

Many big companies in India want to create monopoly in capital market. So, these companies buy all
other companies or deal of merging. SEBI sees whether this merge or acquisition is for development
of business or to harm capital market. 

5. To audit the performance of stock market :

SEBI uses his powers to audit the performance of different Indian stock exchange for bringing
transparency in the working of stock exchanges. 

6. To make new rules on carry - forward transactions:

Share trading transactions carry forward can not exceed 25% of broker's total transactions.

90 day limit for carry forward. 

7. To create relationship with ICAI:

ICAI is the authority for making new auditors of companies. SEBI creates good relationship with ICAI
for bringing more transparency in the auditing work of company accounts because audited financial
statements are mirror to see the real face of company and after this investors can decide to invest or
not to invest. Moreover, investors of India can easily trust on audited financial reports. After Satyam
Scam, SEBI is investigating with ICAI, whether CAs are doing their duty by ethical way or not. 

8. Introduction of derivative contracts on Volatility Index :

For reducing the risk of investors, SEBI has now been decided to permit Stock Exchanges to introduce
derivative contracts on Volatility Index, subject to the condition that;

a. The underlying Volatility Index has a track record of at least one year.

b. The Exchange has in place the appropriate risk management framework for such derivative
contracts.

2. Before introduction of such contracts, the Stock Exchanges shall submit the following:
i. Contract specifications

ii. Position and Exercise Limits

iii. Margins

iv. The economic purpose it is intended to serve

v. Likely contribution to market development

vi. The safeguards and the risk protection mechanism adopted by the exchange to ensure market
integrity, protection of investors and smooth and orderly trading.

vii. The infrastructure of the exchange and the surveillance system to effectively monitor trading in
such contracts, and

viii. Details of settlement procedures & systems

ix. Details of back testing of the margin calculation for a period of one year considering a call and a
put option on the underlying with a delta of 0.25 & -0.25 respectively and actual value of the
underlying. Link 

9. To Require report of Portfolio Management Activities:

SEBI has also power to require report of portfolio management to check the capital market
performance. Recently, SEBI sent the letter to all Registered Portfolio Managers of India for
demanding report.

10.  To educate the investors:

Time to time, SEBI arranges scheduled workshops to educate the investors. On 22 may 2010 SEBI
imposed workshop. If you are investor, you can get education through SEBI leaders by getting update
information on this page.

A capital market is a market for securities (debt or equity), where business enterprises (companies)

and governments can raise long-term funds. It is defined as a market in which money is provided for
periods longer than a year[1], as the raising of short-term funds takes place on other markets (e.g.,
the money market). The capital market includes the stock market (equity securities) and the bond
market (debt). Financial regulators, such as the UK's Financial Services Authority (FSA) or the U.S.
Securities and Exchange Commission (SEC), oversee the capital markets in their designated jurisdictions
to ensure that investors are protected against fraud, among other duties.

Capital markets may be classified as primary markets and secondary markets. In primary markets, new
stock or bond issues are sold to investors via a mechanism known as underwriting. In the secondary
markets, existing securities are sold and bought among investors or traders, usually on a securities
exchange, over-the-counter, or elsewhere.