1. INDORE INSTITUTE OF LAW
(Affiliated to D.A.V.V. & BCI)
Submitted To: Submitted By:
MR. JAIDEV MAHENDRA Name: AAKASH TIWARI
Date: 29/07/2020 Roll No.: 70440424
Enrollment No.: DL1701114
Subject: Banking Law
Topic: Grand Viva-II
IIIrd Year, VIth Semester (Batch: 2017-20)
The Securities and Exchange Board of India (SEBI) was constituted on 12
April 1988 as a non statutory body through an administrative Resolution of the
Government for dealing with all matters relating to development and regulation of
the Securities market and investor protection and to advise the government on all
these matters. SEBI was given statutory status and powers through and ordinance
promulgated on January 30, 1992. SEBI was established as a statutory body on 21
February 1992. The ordinance was replaced by an Act of Parliament as 4th April
1992. The Preamble of SEBI Act, 1992 enshrines the objectives of SEBI - to protect
the interest of investor in securities market and to promote the development of
and to regulate the securities market.
4. SECURITIES AND EXCHANGE BOARD OF INDIA
The Securities and Exchange Board of India has been established under the
Section 3 of the SEBI Act of 1992. This act provides for the establishment of SEBI
full with statutory powers for working towards the following :
(a) The protection of interests of the investors in securities market.
(b) The promotion for the development of the securities market.
(c) Work for the regulation of the securities market.
5. COMPOSITION OF SEBI:
The Board of Securities & Exchange Board of India (SEBI) is comprised of 9
members, excluding the Chairman. It is managed by its members, in the following
• A Chairman is nominated by the Union Government.
• 2 members of SEBI, are officers from the Union Ministry of Finance.
• 1 member of SEBI, is from the Reserve Bank of India.
• There are 3 whole-time members, who are nominated by the Government of
• There are 2 Part-time members, who are also nominated by the Government of
Presently, the Chairman of SEBI is Ajay Tyagi.
6. FUNCTIONS OF SEBI:
• Registering and stock exchanges, merchant banks, mutual funds, underwriters,
registrars to the issues, Brokers, Sub-brokers, transfer agents, etc.
• Levying various fees and other charges(as 1% of the issue amount of every
company issuing shares kept by it as a caution money in the concerned stock
exchange where the company is enlisted).
• Promoting the knowledge in investor education.
• It conducts audit and Inspections of stock exchanges and their various
7. • It Regulates the business in stock exchanges and other securities markets in the
economy. It prohibits Insider Trading by keeping a check when insiders of a
company buy securities of that company.
• It takes strict action against insider trading. An Insider is any individual who is
connected with the company like its directors or promoters, etc. These ‘insiders’
possess sensitive information which has potential to affect the prices of the
securities in the market. However, you would point out that such information is not
available to common people, while the insiders can take advantage of this
information to make profit. This is known as Insider Trading.
8. • It is involved in registering and regulating the working of players in stock
exchanges like stock brokers, sub-brokers, market makers, etc.
• It Promotes as well as regulates the self-regulatory organizations also.
• SEBI prohibits the fraudulent and unfair trade practices in the securities market.
• SEBI is also interested in calling for information, undertaking inspections,
conducting audits and inquiries of the stock exchanges, intermediaries, self –
regulatory organizations, mutual funds and other persons associated with the
securities market in the country.
9. • It keeps a check on Price-rigging by fraud investors. Price rigging is basically
manipulation of the prices of securities for inflating or deflating the market price of
securities. Such practices are harmful for the performance of market at large.
• It in involved in performing other concerned functions as may be prescribed to it
from time to time.
SEBI for the discharge of its objective i.e. “to protect the interest of
investor in securities market and to promote the development of and to regulate
the securities market” take multiple action in recent years. Which include
introduction of many regulations like Insider trading, Corporate governance,
Listing regulations etc. With the advent of such laws it was expected that the
Indian economy will surely boost with the sharp eye of watchdog i.e. SEBI.