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Structure, Function, mandate of SEBI in india

The Securities and Exchange Board of India was constituted as a non-statutory body on April 12, 1988 through a resolution of the Government of India. The Securities and Exchange Board of India was established as a statutory body in the year 1992 and the provisions of the Securities and Exchange Board of India Act, 1992 (15 of 1992) came into force on January 30, 1992.

The Preamble of the Securities and Exchange Board of India describes the basic functions of the Securities and Exchange Board of India as “…to protect the interests of investors in securities and to promote the development of, and to regulate the securities market and for matters connected therewith or incidental thereto”

AFD handles all work related to Alternative Investment Funds (AIF), Venture Capital Funds (VCF), Foreign Venture Capital Investors (FVCI), Foreign Portfolio Investors (FPI), Designated Depository Participant (DDP) and Custodians.

SEBI stands for the Securities and Exchange Board of India. It is the regulatory authority responsible for overseeing the securities market in India. Established in 1988 through an act of Parliament, SEBI was given statutory powers to regulate and protect the interests of investors in securities, promote the development of the securities market, and regulate the securities market’s intermediaries.

Securities and Exchange Board of India Act, 1992

The Securities and Exchange Board of India Act, 1992 is a significant piece of legislation that established the Securities and Exchange Board of India (SEBI) as the regulatory authority for the securities market in India.

The Act was enacted by the Parliament of India and came into force on April 30, 1992. It provides SEBI with statutory powers to regulate and oversee various aspects of the securities market. Not only this, the Act protects the interests of investors and promotes the development and integrity of the securities market.

Role of SEBI in the Indian Financial Market

Here are a few of the key roles and functions of SEB:

Regulatory Functions

SEBI is tasked with regulating and supervising various segments of the securities market, including stock exchanges, stockbrokers, depository participants, mutual funds, portfolio managers, investment advisers, credit rating agencies, and other market intermediaries. The Act empowers SEBI to formulate regulations, issue guidelines, and prescribe codes of conduct to govern the conduct of market participants.

Investor Protection

The Act aims to protect the interests of investors by requiring issuers of securities to make accurate and timely disclosures, promoting transparency and fairness in the securities market, and prohibiting fraudulent and unfair trade practices. SEBI is authorized to take measures to prevent market manipulation, insider trading, and other market abuses.

Enforcement Powers

SEBI is vested with enforcement powers to investigate violations of securities laws and regulations, conduct inquiries and inspections, impose penalties and sanctions on offenders, and initiate legal proceedings against individuals and entities found guilty of market misconduct.

Market Development

The Act empowers SEBI to promote the development and expansion of the securities market in India by introducing new products and services, facilitating capital formation, encouraging innovation and technological advancements, and attracting domestic and foreign investments.
Appeals and Adjudication: The Act provides for the establishment of the Securities Appellate Tribunal (SAT) as an appellate authority to hear appeals against SEBI’s orders and decisions. SAT has the power to adjudicate disputes related to securities laws and regulations.

Investor Education and Awareness

SEBI undertakes initiatives to educate investors about the risks and opportunities associated with investing in the securities market. It conducts investor awareness programs, disseminates investor education materials, and provides guidance on prudent investment practices, risk management, and regulatory compliance. SEBI aims to empower investors with knowledge and skills to make informed investment decisions and protect themselves from fraud and misconduct.

Powers of SEBI

The Securities and Exchange Board of India (SEBI) is endowed with extensive powers to regulate and oversee various aspects of the Indian securities market.

Quasi-Judicial Powers

SEBI has quasi-judicial powers to adjudicate disputes, conduct hearings, and pass orders in matters related to securities law violations and regulatory enforcement actions.
It appoints adjudicating officers to hear and decide on enforcement cases, issue orders, and impose penalties or sanctions on individuals and entities found guilty of violating securities laws and regulations.
SEBI’s quasi-judicial proceedings follow principles of natural justice, including the right to be heard, the right to present evidence, and the right to appeal its decisions.
SEBI’s decisions can be challenged through appeals to the Securities Appellate Tribunal (SAT) and, subsequently, to the courts, providing a mechanism for judicial review of its quasi-judicial actions.

Quasi-Legislative Powers

SEBI has quasi-legislative powers to make rules, regulations, guidelines, and circulars governing various aspects of the securities market. It formulates regulatory frameworks to govern the issuance, trading, listing, and disclosure of securities, as well as the conduct of market participants.
SEBI’s quasi-legislative functions involve rulemaking activities aimed at ensuring investor protection, market integrity, and the orderly functioning of the securities market.
The regulations are enforceable and binding on market participants, and non-compliance can result in disciplinary actions and penalties.

Quasi-Executive Powers

SEBI exercises quasi-executive powers to implement and enforce securities laws and regulations. It conducts investigations, inquiries, and inspections to gather evidence, detect irregularities, and enforce compliance with securities laws. SEBI has the authority to issue directives, impose trading restrictions, and take enforcement actions against individuals and entities found to have violated securities laws and regulations.

SEBI’s quasi-executive functions involve monitoring market activities, enforcing regulatory compliance, and maintaining market integrity through proactive interventions and enforcement measures.

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