SEBI । What is SEBI?

What is SEBI? 

The full form of SEBI is 'The Securities and Exchange Board of India'. It is a statutory regulatory body established by the Indian government in 1988 to oversee and regulate the securities market in India. SEBI is responsible for the development, promotion, and regulation of the securities market in India, as well as protecting the interests of investors.

The securities market is a crucial aspect of the Indian economy. It provides a platform for companies to raise capital through the issuance of securities such as shares and debentures. The securities market also allows investors to invest their money in these securities and earn returns on their investments.

 

SEBI's History

SEBI was established in 1988 by the Indian government to regulate the securities market in India. Before the establishment of SEBI, the securities market in India was unregulated, and there were many malpractices and scams taking place. SEBI was created to bring transparency and accountability to the securities market and protect the interests of investors.

SEBI was initially set up as a non-statutory body but was later given statutory powers through the SEBI Act, which was passed by the Indian Parliament in 1992. The SEBI Act gave SEBI the power to regulate the securities market in India, register and regulate intermediaries such as brokers and underwriters and impose penalties on violators of its regulations.

SEBI's Role and Functions

SEBI's primary role is to regulate the securities market in India. It does this by developing and implementing regulations that govern the securities market and ensuring compliance with these regulations. SEBI's regulations cover a wide range of activities related to the securities market, including the issuance of securities, trading in securities, and the activities of intermediaries such as brokers and underwriters.

SEBI's functions include---

• Regulating the issuance of securities:- SEBI regulates the issuance of securities by companies in India. Companies are required to comply with SEBI's regulations when issuing securities such as shares and debentures. SEBI ensures that the information provided by companies in their prospectus is accurate and complete and that investors are provided with all the necessary information to make an informed investment decision.
• Regulating trading in securities:- SEBI regulates trading in securities on the stock exchanges in India. It ensures that the stock exchanges operate in a fair and transparent manner and that investors are protected from fraudulent practices such as insider trading and market manipulation.
• Regulating intermediaries:- SEBI regulates intermediaries such as brokers, underwriters, and portfolio managers. It ensures that these intermediaries comply with SEBI's regulations and operate in a fair and transparent manner.
• Prohibiting fraudulent and unfair trade practices:- SEBI prohibits fraudulent and unfair trade practices in the securities market. It imposes penalties on those who engage in such practices and takes legal action against them.
• Educating investors:- SEBI educates investors about the securities market and their rights and responsibilities as investors. It conducts investor awareness programs and publishes information on its website to help investors make informed investment decisions.

SEBI's Impact on the Securities Market

SEBI has had a significant impact on the securities market in India. Since its establishment, SEBI has brought transparency and accountability to the securities market and protected the interests of investors. SEBI's regulations have helped to prevent malpractices and scams in the securities market, and its enforcement actions have deterred potential violators of its regulations.