Introduction:-

The Securities Exchange Board of India or widely referred as SEBI is the

regulatory body for securities and commodity market in India under the ownership
of Ministry of finance within the Government of India. It was established on 12
April 1988 as an executive body and was given statutory powers on 30th January
1992 to the SEBI Act 1992.
Security and security and exchange Board of India [SEBI] was established in 1998
as a type for regulating security market. It became and autonomous body on 30th
January 1992 and was accorded statutory powers with the passing of SEBI at 1992
by the Indian Parliament. Baby has a headquarter at business district of Bandra
Kurla Complex in Mumbai and has Northern Eastern southern and western region
offices in New Delhi, Kolkata, Chennai and Ahmedabad respectively. It has
opened local offices at Jaipur and Bangalore and has opened office at Guwahati,
Bhubaneswar, Patna, Kochi and Chandigarh in financial year 2013-14.
Controller Of capital issues was the regulatory authority before SEBI came into
existence; it desired authority from Capital Issues Control Act, 1947. The SEBI is
managed by its member which consist of the following:
 The chairman is nominated by Union Government of India.
 Two members, i.e. Officers from the Union Finance Ministry.
 One member from Reserve Bank of India or RBI.
 The remaining five members are nominated by the Union Government of
India out of them at least three shall be whole-time members.
After the amendment of 1999 collective investment scheme for brought under
SEBI except NIDHIS, chit funds and cooperative societies.
 SEBI Logo

 Organisation Structure
Madhabi Puri Buch took charge of chairman on 1 March 2022, replacing Ajay
Tyagi whose term ended on 28 February 2022. Madhabi Puri Buch is the woman
chairperson of SEBI.
 Current Board members
The board comprises:-
Name Designation
Madhabi Puri Buch Chairman
S.K. Mohanty Whole Time Member
Raje Prem Kumar -
Ashwini Bhatia Whole Time Member
Ajay Seth Part-time Member
Rajesh Verma Part-time Member
M. Rajeshwar Rao Part-time Member
V. Ravi Anshuman Part-time Member

 List of Past Chairpersons

Name From To
Madhabi Puri Buch 1 March 2022 Present
Ajay Tyagi 10 February 2017 28 February 2022
U.K. Singh 18 February 2011 10 February 2017
C.B. Bhave 18 February 2008 18 February 2011
M. Damodaran 18 February 2005 18 February 2008
G.N. Bajpal 20 February 2002 18 February 2005
D.R. Mehta 21 February 1995 20 February 2002
S.S. Nadkarni 17 January 1994 31 January 1995
G.V. Ramkrishna 24 August 1990 17 January 1994
Dr.S.A. Dave 12 April 1988 23 August 1990

 Major Achievements
SEBI have enjoyed success as a regulator at pushing systematic reforms
aggressively and successively. SEBI is credited for quick movement towards
making the market electronic and paperless by introducing T + 5 rolling cycle
from July 2001 and T + 3 in April 2002 and further to T + 2 in April 2003. The
Rolling cycle of T + 2 means settlement is done in 2 days after trade date. SEBI
has been active in setting up the regulations as required under law. SEBI did away
with the physical certificates that was prone to postal delay, theft and forgery, apart
from making the settlement process slow and cumbersome by passing Depository
Act,1996.
SEBI has also been instrumental in taking quick and effective steps in light of the
global meltdown in Satyam fiasco. In October 2011 it increased the extent and
quantity of disclosures to be made by Indian corporate promoters. In light of the
global meltdown, it liberalize the takeover code to facilitate investment by
removing regulatory structures. In one such move, SEBI has increased the
application limit for retail investors to Rupees 2 lakh from Rupees 1 lakh at
present.
On the occasion of world investor week 2022 SEBI executive director Shri G.P.
Garg launched a book on Financial Literacy. This book is a joint effort between
Metropolitan Stock Exchange of India Limited and CASI New York.
 SEBI Bhavan
Plot no. C-7, 'G' Block, Bandra Kurla Co mplex, Bandra(E), Mumbai - 400051, Maharashtra

 SEBI and Regional S ecurities Exchanges

SEBI in its circular dated May 30, 2012 gave exit-guidelines for security
exchanges. This was mainly due to illiquid trade of many of 20+ regional Security
exchanges. It had asked many of these exchanges to either meet the required
criteria or take a graceful exit. SEBI’s new norms for security exchanges mandate
that it should have minimum net worth of Rs 1 billion and annual trading of Rs 10
billion. The Indian Securities market regulator SEBI had given the recognised
securities exchanges 2 years to comply or exit the business.
 Process of de-recognition and exit
Following is an excerpts from the circular:-
1. Exchanges may seek exit through voluntary surrender of recognition.

2. Security where the annual trading turnover on its own platform is less than
Rupees 10 billion can apply to SEBI for voluntary surrender of recognition
and exit, at any time before the expiry of 2 years from the date of issuance of
the circular.

3. If the Securities exchange is not able to achieve the prescribed turnover of

Rs 10 billion on continuous basis or does not apply for voluntary surrender
of recognition and exit before the expiry of 2 years from the date of the
circular, SEBI shall proceed with compulsory de-recognition and exit of
such Securities exchanges, in terms of the conditions as may be specified by
SEBI.

4. Securities exchanges which are already de-recognised as on date, shall

make an application for exit within 2 months from the date of this circular.
Upon failure to do so, the de-recognize exchange shall be subject to
compulsory exit process.
  Departments In SEBI
SEBI regulate Indian financial market to 20 departments, which are as follows:-
1. Commodity Derivatives Market Regulation Department [CDMRD]
2. Corporation Finance Department [CFD]
3. Department of Economic and Policy Analysis [DEPA]
4. Department of Debt and Hybrid Securities [DDHS]
5. Enforcement Department-I [EFD-I]
6. Enforcement Department-II [EFD-II]
7. Enquiries and Adjudication Department [EAD]
8. General Services Department [GSD]
9. Human Resources Department [HRD]
10.Information Technology Department [ITD]
11.Integrated Surveillance Department [ISD]
12.Investigations Department [IVD]
13.Investment Management Department [IMD]
14.Legal Affairs Departments [LAD]
15.Market Intermediaries Regulation and Supervision Department [MIRSD]
16.Market Regulation Department [MRD]
17.Office of International Affairs [OIA]
18.Office of Investor Assistance and Education [OIAE]
19.Office of Chairman [OCH]
20.Regional Offices [ROs]

 Objectives of SEBI
Following are some objectives of the SEBI:-
1. Investor Protection: this is one of the most important objective of setting up
the SEBI. It involves protecting the interests of investors by providing
guidance and ensuring that the investment done is safe.
 2. Preventing the fraudulent practices and malpractices which are related to
trading and regulation of the activities of the stock exchange.

3. To develop a code of conduct for the financial intermediaries such as

underwriters, brokers, etc.

4. To maintain a balance between statutory regulation and self regulation.

 Purpose of SEBI
The purpose for which SEBI was set up to provide an environment that paves the
way for mobilization and allocation of resources. It provide practices, framework
and infrastructure to meet the growing demand.
It meets the needs of the following groups:
1. Issuer: For issuers, SEBI provides a marketplace that can be utilised for
raising funds.

2. Investors: It provides protection and supply of accurate information that is

maintained on a regular basis.

3. Intermediaries: It provides a competitive market for intermediaries by

arranging for proper infrastructure.
  The Infamous Scam Of The Satyam Ltd.
 Introduction:-
Satyam Ltd. was once known as the rising star of India. Formed in the year
1987 by Mr Ramalinga Raju with the 20 employees. The company boomed
and developed through the period of 2003-2008 and by the end of March
2008 Satyam’s sales had reached the highest of high of USD$467 an annual
growth compound rate of 35% and it had much more achievements. Six
months after team ‘Satyam’ received the ‘Golden Peacock Award’, on 6th
January 2009, allegations of fraud were made and it was contended that he
had been manipulating with the accounts of the company for years [Rs.
7,316 Crores].
This scandal is a complete display of one’s carelessness of fiduciary
responsibilities, total collapse of ethnic standards; fierce competition and
need to impress stakeholders especially investors, analyst, shareholders, and
the stock market; low ethical and moral standards by the top management
and, greater emphasis on short-term performance. This lead to a complete
down fall of the company. The Citibank where Satyam maintained its bank
accounts were frozen. Several arrest were made including Mr. Raju and his
brother. The Board of Directors was disbanded and the Central Government
on its own motion appointed 10 new directors. Satyam was removed from
Sensex and Nifty. CBI took over the investigation and filed three charge
sheets. The next concern for the government after happening of such event
of great concern was to some how saved this company. This was done
through selling of the company. The successful bidder in doing so was ‘Tech
Mahindra’ which overtook ‘Satyam’ and now it is known as ‘Mahindra
Satyam’. Mr. Raju was granted bail on the ground that the limitation period
of filing the charge sheet by the CBI had expired. Enforcement Director
[ED] files a criminal complaint against 47 persons and 166 corporate entities
headed by Ramalinga Raju. Ramalinga Raju and three others were given six
months jail term by SFIO. The Judge postponed the verdict citing
voluminous documents. Ramalinga Raju and nine others, two of their family
 members were sentence to seven years rigorous imprisonment on Thursday
in the country’s largest-ever corporate fraud. Mr. Raju along with the other
convicted individuals were out on a bail given by the special court in
Hyderabad.

 Role of SEBI in the Satyam case

Now we shall discuss the role of SEBI in the Satyam case. SEBI under
Section 17 of the SEBI Act, 1992 took out an extensive investigation into the
conduct of Satyam and check whether the provision of the SEBI Act, 1992 and
Rules, and Regulations have been violated. They also inspected the available books
of accounts and pertained to the financial statements of Satyam. They also
inspected the documents held by the auditors of Satyam which was
‘Pricewaterhouse Coopers’[PwC]. Mr Raju in his declaration letter about his
mischievous and fradulent activities claim that the reason behind his declaration
was because annually he was juggling with revenue figures because he couldn't
juggle with the expenditure figures so easily, the gap between the ‘book profit’ and
‘actual profit’ kept on increasing every year. He went ahead to buy a Maytas
Infrastructure and Maytas Properties in order to end the gap and show a real profit
of the company or else the company might die. His target was to wipe out the
fictitious profit by doing a real deal in which he ultimately failed and subsequently
he wrote the letter. After this breath-taking revelation which was being termed as
biggest corporate fraud which had shaken everybody. SEBI had kept a target for
itself to sell off the company since it was the last resort through which company
could have been saved. SEBI met with government appointed Board of Directors,
accountants, bankers, government officials and lawyers in order to come up with a
plan immediately.
All of them worked superbly and diligently and brought back the company’s
stability and confidence within a 100-day deadline. SEBI has geared up and pulled
up its socks after this came and has enhanced its working. The SEBI chief at the
time of this case Mr. C.B. Dave said, “Meanwhile, we are looking at some long-
term system improvement. There will be quite a few things we will learn from this
incident and we will take steps for necessary changes accordingly. SEBI relax the
takeover norms at the request of the government-appointed Board of Directors of
Satyam and Company Law Board [CLB] permitted selection of strategic investor
fulfilling certain regulator requirements. SEBI laid down that interested investor
should buy the stake from the newly issued shares amounting to 31 percent of
company’s share capital. The Securities Exchange Board of India [SEBI] approved
to Satyam Computer Services for choosing a strategic investor to acquire 51% of
stake in the embattled company through a global competitive bidding process
which led to buying of Satyam Computer Services by Tech Mahindra.

 Recent Developments In The Case

In the order given by the SEBI on 10th January 2018. SEBI has come hard on
PwC with his with his order. It has impose a ban on all the firm in the PwC
network from auditing listed companies and intermediaries [brokers] for a period
of 2 years held guilty under the Satyam scam. The 108-page SEBI’s order said that
they were not complying with the auditing standards and did not report such a wide
gap developing in the balance sheets of Satyam and PWC was deceitful along with
the main parties involved in the biggest corporate fraud. The order against PwC
was passed as per Section 11 of the SEBI Act and the Prevention of Fraudulent and
Unfair Trade Practices [UFTP]. Section 11 of the SEBI Act gives authority to
SEBI to pass orders in the favour of the investors.