z Amity law school

 Subject-Banking Environment.

 Topic – Role of SEBI.

 Name-Akshat jaiswal .

 Enrollment no.A8111118016.

 Submitted to – Dr.Upendra nath shukla.

z Role of. SEBI

The Securities and Exchange Board of India was

established on April 12, 1992 in accordance with the
provisions of the Securities and Exchange Board of India
Act, 1992.
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Introduction to Security Exchange Board of India (SEBI)

 Securities and Exchange Board of India (SEBI) was formed after the Indian
Parliament passed the Securities and Exchange Board of India Act, 1992 in
response to the Financial Services Assessment Program.

 SEBI Actually established in the year 1988 and given statutory power in 1992.

 With the growth in the dealings of stock markets, lot of malpractices also started
in stock markets such as price rigging, 'unofficial premium on new issue, and delay
in delivery of shares, violation of rules and regulations of stock exchange and
listing requirements. Due to these malpractices the customers started losing
confidence and faith in the stock exchange. So government of India decided to set
up an agency or regulatory body known as Securities Exchange Board of India
(SEB).
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Purpose and Role of SEBI

 The main purpose of SEBI is to keep a check on malpractices and protect the
interest ot mvestors. It was set up to meet the needs ot three groups

 1 Issuers: For 1ssuers it provides a market place in which they Can raise
finance tarly and easuly.

 2. Investors: For investors it provides protectson and supply ot accurate and

correct inOtanon.

 3. Intermediaries: For intermediaries it provides a competitive professional

market.
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The Organizational Structure of SEBI

 SEBI is working as a corporate sector.

 Its activities are divided into five departments. Each department is headed by
an executive director.

 The head office of SEBI is in Mumbai and it has branch office in Kolkata,
Chennai and Delhi.

 SEBI has formed two advisory committees to deal with primary and secondary
markets.

 These committees consist ot market players, investors associations and

eminent persons.
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Objectives of the two Committees

 To advise SEBI to regulate intermediaries.

 To advise SEBl on issue of securities in primary market. To advise sEBI on

disclosure requirements of companies.

 To advise tor changes in legal framework and to make stock exchange more
transparent.

 To advise on matters related to regulation and development ot secondary

stock exchange.

 These committees can only advise SEBI but they cannot force SEBI to take
action on their advise.
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Objectives of SEBI

 To regulate the activities of stock exchange.

 To protect the rights of investors and ensuring safety to their investment. To prevent
fraudulent and malpractices by having balance between self regulation of business
and its statutory regulations.

 To regulate and develop a code of conduct for intermediaries such as brokers,

underwriters, etc.
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Functions of SEBI

 The SEBI performs functions to meet its objectives. To meet three objectives SEBI has
three important functions. These are:

 i. Protective functions

 ii. Developmental functions

 ii. Regulatory functions.

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The Role of SEBI in Corporate Governance and Capital Market Governance

 The Securities Exchange Board of India is essential to corporate governance of India's securities market, as it
serves as the central body that ensures investors are protected and the securities market is regulated.
Corporate governance is the manner in which companies or market systems operate, including the rules,
regulations, policies and standards for accountability, transparency and general corporate integrity. 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,lt is just like mutual funds and 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 tor stopping fraud in capital market. a.lt can ban
on the trading ot those brokers who are involved in fraudulent and unfair trade practices relating to stock
market. b. It can impose the penalties on capital market intermediaries trading if they involve insider Tranding.
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Continued

 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 tor development to 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 tor bringing transparency in
the workin8 ot stock exchanges.
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Conclusion

 As Indian Companies Compete globally for access to capital markets, many are
finding that the ability to benchmark against world cass organization is essential.

 Corporate governance and economic development are intrinsically linked,

development of strong financial systems. effective corporate governance system
promote the Development of strong Financial system.
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