SEBI AND ITS ROLE AS REGULATOR

CA PRATAP VISHNOI

OUTLINE

CONSTITUTION AND ORGANISATIONOBJECTIVESFUNCTIONSPERFORMANCE

CONSTITUTION AND REGULATION

THE SEBI WAS ESTABLISHED ON APRIL 12,1988 THROUGH AN ADMINISTRATIVE ORDER, BUT IT BECAME A STATUTORY AND REALLY POWERFUL ORGANIZATION ONLY SINCE 1992.

SEBI is a body of six members comprising the chairman, two members from amongst the officials of the ministers of central government dealing with Finance and Law.

Two members who are professional and have experience or special knowledge relating to securities market.

One member from RBI.

OBJECTIVES:

To protect the interest of investors in securities. To promote the development of, and to regulate the

securities market and for matters connected therewith or incidental thereto.

To protects the Rights and interests of investors, particularly individual investors.

To prevents trading malpractices and aims at achieving a balance between self-regulation by securities industry and its statutory regulation.

To facilitating an efficient mobilization and allocation of resources through the securities markets, stimulating competition, and encouraging innovations.

FUNCTIONS:

TO REGULATE: Depositories and Participants. Custodians. Debenture trustees, and Trust deeds. FIIs. Insider trading. Merchant bankers Mutual Funds. Port folio managers and investment advisors. Registrars to issue and share transfer agents. Venture capital funds.

PPRIMARY SECURITIES MARKET

SECONDARY MARKET AND INTERMEDIARRIES

MUTUAL FUNDS

MISCELLANEOUS

INVESTOR PROTECTION MEASURES

PERFORMANCE:

Functions of SEBI in Respect of Matters specified in Section 11 of the SEBI Act, 1992:

Violation of advertisement code/Guidelines . Delay in submission of periodical reports. Inadvertent short-selling.Failure to install systems and compliance

mechanism in place.Discrepancies in calculation of annualized

returns in draft offer document.