SECURITIES AND EXCHANGE BOARD OF INDIA

Sebi stands for Securities and Exchange Board of India, it is established in 1988 and
came into statutory power on 30th Jan 1992 through Sebi act 1992 and it became autonomous
body by government of India on 12th April 1992. Its head office is in Mumbai and regional zonal
offices are in New Delhi , Ahmedabad, Chennai and Kolkata.

The present Chairman of Sebi is Ajay Tyagi and former chairman was V.R Sinha(18 Feb
2011-10 Feb 2017) and this chairman was appointed by Union Government of India.

At present ,17 stock exchanges are operating in India, including NSE and BSE, all these
stock exchanges are regulated by the guidelines of Sebi.

Sebi includes the board of directors which includes chairman who is elected by
parliament , two officers from the Ministry of Finance and one member from the reserve bank of
India and five members who are elected by the parliament.

Meaning of Sebi

The securities of Exchange Board of India ( SEBI) are the regulation for the securities
market in India owned by the government of India, securities include shares, debentures, bonds
etc. Sebi works as regulating such markets by forming rules and regulations for such companies
and supervise them to know whether they are working according to its rules or regulations or not.

Reason for Sebi to come into existence

With the expansion of trading in Stock market lot of malpractices has been also started
such as breach of ethics, violation of rules and regulations, insider trading etc. due to such
practices customers lost reliance in the stock exchange as a result of which government of India
decided to set up the regulatory body known as Sebi to gain the faith in stock exchange.

Role of Sebi

1. The main purpose of Sebi is to supervise the rules and regulations to keep the eye on
malpractices and frauds
2. Sebi helps to work the interest of investors .
3. Sebi is set up to protect the needs of mainly three groups
 I. Issuers:

It provides them with a marketplace for raising finances.

II. Investors:

It provides protection to their rights and interests and provides them with important
information on a continuous basis.

III. Intermediaries:

work as a link between the issuers and investors , it provides them competitive
markets so that they are able to render better services.

Functions of Sebi

1. It controls the malpractices and fraudulent transactions in the security market

2. It handles the registration of brokers and sub-brokers.
3. It controls insider trading and imposes penalties for such activities.
4. It helps to provide flexibility in the working of the capital market.
5. Sebi promotes investors education and training of intermediaries to avoid any kind of
fraud.

Powers of Sebi

1. Sebi has the power to make and regulate the bylaws of stock exchanges.
2. Sebi has the power to give notice to any suspicious and can examine them on oath.
3. Sebi has the power to inspect documents, books of account or any intermediaries.
4. Sebi has the power to inspect any document witness under security commission to control
any fraudulent activity.