Securities Exchange Board of India(SEBI)

Introduction: The Securities and Exchange Board of India (SEBI) was established by the government of India on 12 April 1988 as an interim administrative body to promote orderly and healthy growth of the securities market and for investor protection. It was formed officially by the Government of India in 1992 with SEBI Act, 1992 being passed by the Indian Parliament. It was applicable to whole of India. Objective of the SEBI: SEBI formed under SEBI Act, 1992 with the main objective of:1. To protect the interest of the investors in securities. 2. To promote the development of securities market. 3. To regulate the securities market. Management of the Board: As per section 4 of the SEBI Act, 1992 as amended by the Securities and Exchange Board of India (Amendment) Act, 2002, the Board shall consist of the following members:a) A Chairman b) Two members from amongst the officials of the Ministry of the Central Government dealing with Finance and administration of the Companies Act, 1956 c) One member from amongst the officials of the Reserve Bank d) Five other members of whom at least three shall be the whole-time members to be appointed by the central Government Need for SEBI: from book pg.127 Functions of SEBI: from book pg 130 Powers of SEBI: 1. Power of Inspection: The Board can inspects any book, register, other document, record of any listed public company or a public company which intends to get its securities listed on any recognised stock exchange where the Board has reasonable grounds to believe that such company has been indulging in insider trading or fraudulent and unfair trade practices relating to securities market. 2. Power of Court: The Board shall have the same powers as are vested in a civil court under the Code of Civil Procedure, 1908 while trying a suit, in respect of the following matters: (i) the discovery and production of books of account and other documents at such place and such time as may be specified by the Board (ii) summoning and enforcing the attendance of persons and examining them. (iv) inspection of any book, or register, or other document or record of the company or person (v) issuing commissions for the examination of witnesses or documents. 3. Power in the Interest of Securities Market: The Board may order to take any of the following measures either pending investigation or inquiry in the interests of investors or securities market:-

a. suspend the trading of any security in a recognized stock exchange b. restrain persons from accessing the securities market and prohibit any person associated with securities market to buy, sell or deal in securities c. suspend any office-bearer of any stock exchange or self- regulatory organization from holding such position d. impound and retain the proceeds or securities in respect of any transaction which is under investigation 4. Power Regarding Protection of Investors: The Board may take following decision for the protection of investors in two ways: a.) By Specific orders: (i) the matters relating to issue of capital, transfer of securities and other matters. (ii) the manner in which such matters shall be disclosed by the companies; b.) By General Orders: (i) Prohibit any company from issuing prospectus, any offer document, or advertisement soliciting money from the public for the issue of securities (ii) Specify the conditions subject to which the prospectus, such offer document or advertisement 5. Power to Issue Directions: The Board may have power to issue directions after making an enquiry, if he satisfied that it is necessary in the interest of investors or development of securities market or to prevent the affairs of any intermediary or other persons. It may secure the proper management of any such intermediary or class of persons associated with the securities market. He may also give direction to any company in respect of matters specified in section 11A as may be appropriate in the interests of investors in securities and the securities market. 6. Power to Investigation: The Board may have power to investigate any person/company related to any fraud or violation in the provisions of the SEBI Act. The Investigating Authority may keep in its custody any books, registers, other documents and record produced for six months and thereafter shall 7. Power to Cease and Desist Proceeding: The Board have power to Cease and desist proceedings after causing an inquiry to be made, that any person has violated, or is likely to violate any provisions of this Act. It may pass an order requiring such person to cease and desist from committing or causing such violation. Provided that the Board shall not pass such order in respect of any listed public company or a public company which intends to get its securities listed on any recognized stock exchange unless the Board has reasonable grounds to believe that such company has indulged in insider trading or market manipulation. 8. Other Powers:

To impose monetary penalities. To grant license to any person for the purpose of dealing in certain areas. To compel certain companies to list their shares in one or more stock exchanges. To delegate powers exerciable by it.