SEBI : The full form of SEBI is Securities and Exchange Board of India. Why SEBI was needed in the Indian stock market? In today’s article, we will discuss all these things.
Capital market started emerging in India by the end of 1970s. The interest of the people started moving towards the stock market.
Along with the huge popularity in the stock market, some informal incidents also started increasing like many cases like rigging in share prices, insider trading, delay in delivery of shares, violation of rules of stock exchange.
Due to all these incidents, there was a lack of faith in the stock market among the common people.
After that, the Government of India established an institution as a non-constitutional body in 1988 with the objective of preventing these happenings and protecting the interest of the investors, whose headquarters was kept in Mumbai.
When was SEBI established?
SEBI was formed in April 1988 under a resolution of the Government of India with the objective of monitoring the stock market. Initially SEBI did not have statutory powers.
Then in 1992, some powers were given to SEBI by the Indian Parliament under the SEBI Act 1992, through which it can now control the capital market in a better way. SEBI Regional Offices were set up at Ahmedabad, Delhi, Chennai and Kolkata.
What is SEBI?
Official website of SEBI : https://www.sebi.gov.in/
SEBI (Securities and Exchange Board of India) is an autonomous body of India, which was established with the objective of monitoring the activities in the capital market, its main objective is to protect the interests of the investors of the Indian stock market, besides issuing capital , transfer of securities and other related matters are also to be looked after.
Composition of SEBI
The SEBI Board consists of a total of 9 members, in which one member is appointed by the Reserve Bank of India, two members are appointed by the Union Ministry of Finance and a chairman and five members are appointed by the Government of India. Out of these five members, 3 are working as full time members.
At present Ajay Tyagi is the chairman of SEBI who was appointed on 10 January 2017 whose tenure has been extended by 18 months till February 2022.
Works of SEBI
• The tasks assigned are as follows-
• To protect the interests of investors in the securities market and to regulate and develop the securities market through appropriate measures.
• Prohibiting insider trading.
• To train people associated with the stock market and promote investor education.
• Eliminating Unfair Trade Practices related to the stock market.
• SEBI also does the work of granting license to the stock broker, if any broker is found to be doing wrong then SEBI can also cancel his license.
• To register and regulate the collective investment schemes of mutual funds.
• To regulate and register the functions of stockbrokers, sub-brokers, share transfer agents, trustees, merchant bankers, under-writers, gold exchanges, portfolio managers, etc.
Also Read:-
How to Invest in Share Market in India? An Ultimate Beginner’s Guide!
Role of SEBI in Indian stock market
• SEBI Act 2002 provides wide powers to SEBI for more stringent punishment to the culprits of stock market disturbances.
• Penalty up to Rs 25 crore can be imposed by SEBI for insider trading under this Act.
• In cases of fraud with small investors, there is a provision of a fine of up to one crore rupees, at the rate of one lakh rupees per day.
• After this an ordinance was issued by the President in 2013 to increase the regulatory powers of SEBI.
• Innovative methods of raising capital through various schemes, which were not under the purview of ‘SEBI’ till now, will now come under the purview of ‘SEBI’.
• All the schemes which have raised more than Rs 100 crore from the people have now been brought under the purview of SEBI.
• SEBI has the right to investigate, confiscate and attach property of persons or entities involved in fraud.
• SEBI has also been empowered to detain those who do not follow the rules.
SEBI related Questions and Answers (FAQ)
When was SEBI formed under SEBI Act?
SEBI was established on 12 April 1992 as per the provisions of SEBI Act 1992.
Who is the present Chairman of SEBI?
The present Chairman of SEBI is Ajay Tyagi. (Dated 23-7-2021 when the article was written)
When is SEBI established?
SEBI was established on 12 April 1992.
What is the role of SEBI in capital market?
SEBI does proper regulation and control of the capital market of our country. The detailed information is given above.
At present, how many stock exchanges are registered in SEBI?
At present there are 8 active stock exchanges in India, before that there were many regional stock exchanges which are now closed.
What is the tenure of the Chairman of SEBI?
The tenure of the Chairman of SEBI is for 5 years.
Who controls the capital market?
SEBI has the statutory right to control the capital market.
How to complain to SEBI?
Free Investor Support Service: Visit 1800 266 7575.
Nirmal is a NISM Certified Derivative Trader & the Founder of InvestandEarn.net (Financial Blog). He entered the world of Equity research to explore his interests in financial markets having 5+ Years of Experience in Share Market Trading & Investing. Nirmal frequently writes about Share Market Trading & Investment and publishes his personal view on the market. Drop him a mail at nirmal.jaysval@investandearn.net.
