ROLE AND FUNCTIONS

In 1988 the Securities and Exchange Board of India (SEBI) was established by the Government of India through an executive resolution, and was subsequently upgraded as a fully autonomous body (a statutory Board) in the year 1992 with the passing of the Securities and Exchange Board of India Act (SEBI Act) on 30th January 1992. PREAMBLE 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

Salient features of SEBI act 1992

Shall be a body corporate with perpetual succession an

common seal with power to acquire hold and dispose of property. HQ will be in Mumbai and may establish offices at other places in India. Chairman and members of board will be appointed by the central government. Government can prescribe terms of offices and other conditions of service of the board and chairman. Primary duties of the board is to protect the interest of the investors.

ORGANISATIONAL STRUCTURE Management of the Board

The Board shall consist of the following members, namely:a) a Chairman b) Two members, One from amongst the officials of the Ministry

of the Central Government dealing with Finance and second from administration of the Companies Act, 1956. c) One member from amongst the officials of the Reserve Bank of India. d) Five other members of whom at least three shall be the wholetime members to be appointed by the central Government .

Objectives of SEBI
The primary objective of SEBI is to promote healthy and orderly growth -of the securities market and secure investor protection. The objectives of SEBI are as follows: To protect the interest of investors, so that, there is a steady flow of savings into the capital market. To regulate the securities market and ensure fair practices. To promote efficient services by brokers, merchant bankers, and other intermediaries, so that, they become competitive and professional.

Functions of SEBI
The SEBI Act, 1992 has entrusted with two functions, they are Regulatory functions And Developmental functions

Regulatory Functions
Regulation of stock exchange and self regulatory

organizations. Registration and regulation of stock brokers, subbrokers, Registrars to all issues, merchant bankers, underwriters, portfolio managers etc. Registration and regulation of the working of collective investment schemes including mutual funds. Prohibition of fraudulent and unfair trade practices relating to securities market. Prohibition of insider trading Regulating substantial acquisition of shares and takeover of companies.

Developmental Functions
Promoting investors education
Training of intermediaries Conducting research and publishing information useful to

all market participants. Promotion of fair practices Promotion of self regulatory organizations

Powers of SEBI
Power to call periodical returns from recognized stock exchanges. Power to compel listing of securities by public companies. Power to levy fees or other charges for carrying out the purposes of regulation. Power to call information or explanation from recognized stock exchanges or their members. Power to grant approval to bye-laws of recognized stock exchanges.

Powers of SEBI continue

Power to control and regulate stock exchanges.
Power to direct enquiries to be made in relation to affairs of stock exchanges or their members.

Power to make or amend bye-laws of recognized stock exchanges.

Power to grant registration to market intermediaries.

Power to declare applicability of Section 17 of the Securities Contract (Regulation) Act 1956, in any State or area, to grant licenses to dealers in securities.

Role and Functions Of Stock Market

Established for the purpose of assisting, regulating and

controlling business of buying, selling and dealing in securities Provides a market for the trading of securities to individuals and organizations seeking to invest their saving or excess funds through the purchase of securities Provides a physical location for buying and selling securities that have been listed for trading on that exchange Establishes rules for fair trading practices and regulates the trading activities of its members according to those rules Ensure transparency by providing information to the investor and helps in intelligent decision making about the particular stock based on information

SEBI & Central Govt.

The Central Government has power to issue directions to

SEBI Board, supersede the Board, if necessary and to call for returns and reports as and when necessary. The Central Government has also power to give any guideline or to make regulations and rules for SEBI and its operations. The activities of SEBI are financed by grants from Central Government, in addition to fees, charges etc. collected by SEBI. The fund called SEBI General Fund is set up, to which, all fees, charges and grants are credited. This fund is used to meet the expenses of the Board and to pay salary of staff and members of the body.