Banking Awareness: Important Facts About SEBI


Dear Reader, You already would have heard about SEBI – Securities and Exchange Board of India. Below are some important facts which every bank job aspirant must know.

  • Securities and Exchange Board of India (SEBI) was established in 1988 as a replacement of the Controller of Capital Issues (CCI) which was the regulatory authority before SEBI.
  • SEBI was given statutory powers on 12 April 1992 through SEBI Act, 1992.
  • SEBI acts as the regulator for the securities market in India.
  • Its Head quarters is located in Mumbai.

Objectives of SEBI:

  • To regulate activities of stock exchange
  • To safeguard the rights of investors and also to ensure the safety of their investment
  • To prevent malpractices by balancing its self regulating business and statutory regulations
  • To manage and develop a code of conduct for intermediaries

SEBI operates to fulfil the needs of the following three groups

  1. Issuers – SEBI provides a market place in which they (the issuers) can raise finance fairly.
  2. Investors – SEBI provides safety and supply of accurate and correct information
  3. Intermediaries – SEBI provides a competitive professional market for intermediaries.

Organisational Structure of SEBI:

  • A Chairman (nominated by Union Government of India)– Upendra Kumar Sinha
  • 2 members – one official from the Ministry of finance (Joint Secretary, Prakash Chandra) and another from Administration of Company Act, 1956. (Secretary, Naved Masood)
  • 1 official from RBI (Deputy Governor, Anand Sinha)
  • 5 other members out of that 3 shall be whole time members appointed by the central government.

They are as follows:

  1. Nishant Rathi – full-time member
  2. Rajeev Kumar Agarwal – full-time member
  3. S. Raman – full-time member
  4. V. K. Jairath Magya – Part-time member
  5. Raje Kumar – part-time member

Functions of SEBI:

  1. Regulatory Functions are performed to regulate the business in stock exchange
    • SEBI regulates the workflow of mutual funds
    • It also conduct inquiries and audit of stock exchanges
    • It frames the rules and regulations and to develop a code conduct between intermediaries
  2. Protective Functions are performed to protect the interest of investors and also safety for their investment.
    • It involves to check on Price Rigging.
    • It prohibits insider trading
    • It also prohibits fraudulent and Unfair Trade Practices
  3. Development Functions are performed to develop the activities of stock exchange and improve the business.
    • It gives training for intermediaries of the securities market
    • It promotes the activities of stock exchange

Some of the Committees formed by SEBI are as follows:

  • Alternative Investment Policy Advisory Committee (AIPAC)
  • Risk Management Review Committee (RMRC)
  • Takeover Regulations Advisory Committee
  • Technical Advisory Committee
  • Primary Market Advisory Committee (PMAC)
  • Depository System Review Committee (DSRC)
  • Corporate Bonds and Securitization Advisory Committee (CoBoSAC)
  • SEBI Committee on Disclosures and Accounting Standards (SCODA)
  • Qualified Audit Report Review Committee (QARC)

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