SEBI-Securities & Exchange

Board of India
III UG – PSGCAS
Dr. S. GOWRI
 Formation of SEBI

• SEBI was founded on April 12,

1992, under the SEBI Act, 1992.
 Why SEBI? / Purpose
• To regulate the Indian capital markets
(How?)
• It monitors and regulates the securities
market

• It protects the interests of the investors by

enforcing certain rules and regulations. 
 SEBIs Regional Offices
• Headquartered in Mumbai

• SEBI has regional offices in New Delhi,

Chennai, Kolkata and Ahmedabad
along with other local regional offices
across prominent cities in India.
 Structure of SEBI

Departments of SEBI
• Foreign Portfolio Investors and Custodians
• Human Resources Department
• Information Technology
• Investment Management Department
• Office of International Affairs
• Commodity and Derivative Market Regulation
Department
• National Institute of Securities Market
 Mgt of SEBI – Board of Directors
• 1 chairman nominated by the Union
Government of India
• 2 members from the Union Finance Ministry
of India
• 1 member from the Reserve Bank of India
• 5 members nominated by the Union
Government of India
 Advisory committees of SEBI
• SEBI has formed two advisory committees to
deal with primary and secondary markets.

• These committees consist of market players,

investors associations and eminent persons.
 Objectives of the two Committees

To advise SEBI
• to regulate intermediaries.
• on issue of securities in primary market.
• on disclosure requirements of companies.
• for changes in legal framework and to make
stock exchange more transparent.
• on matters related to regulation and
development of secondary stock exchange.
 Objectives of SEBI
• To ensure that the Indian capital market works
in a systematic manner

• To provide investors with a transparent

environment for their investment.

• To promote the development of the capital

markets. 
 Functions of SEBI

• Issuers of the Securities: Companies that issue

securities are listed on the stock exchange.
They issue shares to raise funds. SEBI ensures
that the issuance of Initial Public Offerings
(IPOs) and Follow-up Public Offers (FPOs) can
take place in a healthy and transparent way.
 Functions ctd.

• Protects the Interests of Traders & Investors:

It is a fact that the capital markets are
functioning just because the traders exist. SEBI
is responsible for safeguarding their interests
and ensuring that the investors do not
become victims of any stock market fraud or
manipulation.
 Functions ctd.

• Financial Intermediaries: SEBI acts as a

mediator in the stock market to ensure that all
the market transactions take place in a secure
and smooth manner. It monitors every activity
of the financial intermediaries, such as broker,
sub-broker, NBFCs, etc
 Powers of SEBI

• 1. Quasi-Judicial: With this authority, SEBI can

conduct hearings and pass ruling judgments in
cases of unethical and fraudulent trade practices.

• This ensures transparency, fairness,

accountability and reliability in the capital
market.

• SEBI PACL case is an example of this power.

 2. Quasi-Legislative power
• Allows SEBI to draft rules and regulations for the
protection of the interests of the investor.

• One such regulation is SEBI LODR (Listing

Obligation and Disclosure Requirements). It aims
at consolidating and streamlining the provisions
of existing listing agreements for several
segments of the financial market like equity
shares.
 3. Quasi-Executive power

• SEBI is authorised to file a case against anyone

who violates its rules and regulation. It is
empowered to inspect account books and
other documents as well if it finds traces of
any suspicious activity.