Answer the question in about fifty words:
What is SEBI and what is its role?
The Securities and Exchange Board of India or SEBI is the regulator for the securities market in India.
Role of SEBI:
- It is a supervising and regulatory body to check certain malpractices and works for promoting the securities markets in India.
- It has three functions rolled into one body: quasi-legislative, quasi-judicial and quasi executive.
- It drafts regulations in its legislative capacity, it conducts investigation and enforcement action in its executive function and it passes rulings and orders.
Stock exchange is a specific place where trading of the securities is arranged in an organized method. In simple words, it is a place where shares, debentures, and bonds (securities) are purchased and sold. The term securities include equity shares, preference shares, debentures, government bonds, etc. including mutual funds.
The government of India established the market watchdog i.e. Securities Exchange Board of India (SEBI) IN April 1988.
SEBI as securities Exchange Board of India became a statutory body under SEBI Act, 1992, and its Head Office located in Mumbai. At present, SEBI have offices in Mumbai, Calcutta, New Delhi, and Chennai. SEBI consists of the following members.
- A Chairman
- Two members from the Ministries of the Central Government. Dealing with Finance and Law
- Two other members to be appointed by the Central Government.
In order to regulate and promote the capital market, SEBI performs the following Role.
- Regulating the business in stock exchanges and many other securities markets.
- Registering and regulating the working of stockbrokers, share transfer agents, sub-brokers, bankers to an issue, etc.
- Promoting and regulating self-regulatory organizations.
- Prohibiting fraudulent and unfair trade practices relating to the securities market.
- Registering and regulating the working of venture capital funds and collective investment schemes including mutual funds.
- Promoting Investor education and training of intermediaries of the securities market.
- Prohibiting insider trading in securities.
- Conducting research and carrying out publications.
- Calling for information, form undertaking inspection, conducting inquiries and audits of stock exchanges and market intermediaries.
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- Securities and Exchange Board of India (SEBI)