Sebi and its functions

2. Securities and Exchange Board of India (SEBI) was first
established in the year 1988 AQF as a non-statutory body
for regulating the, securities market.
It became an autonomous body by the Government of
India on 12 April 1992 and given statutory powers in
1992 with SEBI Act 1992 being passed by the Indian
Parliament.
SEBI has its headquarters at the business district of Bandra
Kurla Complex in Mumbai, and has Northern, Eastern,
Southern and Western Regional Offices in New
Delhi, Kolkata, Chennai and Ahmedabad respectively.

3. SEBI Guidelines regarding ESOP.
SEBI Guidelines for Opening of Trading Terminal Abroad.
SEBI Guidelines for Employee Stock Option Scheme.
SEBI Guidelines for Disclosure and Investor Protection.
SEBI Guidelines on (e-IPO).
SEBI Guidelines for Delisting of Securities.
SEBI Guidelines Aid for Legal Proceedings.
SEBI Guidelines for Merchant Bankers.
SEBI Guidelines for Anti Money Laundering.

4. The board shall consists
of following members:-
Chairman
Two members, one
from amongst the
officials of the central
government dealing
with finance and
another from the
administration of
companies act of
1956.
One members from
amongst the
officials of the
reserve bank of
India.
Five other
members of whom
at least three shall
be the whole-time
members to be
appointed by the
central
government.

5. Protective
Functions
•It checks price ragging.
•It prohibits Insider Trading.
•SEBI prohibits fraudulent and Unfair Trade Practices.
Developmental
Functions
•SEBI promotes training of intermediaries of the securities market.
•SEBI tries to promote activities of stock exchange by adopting flexible and
adoptable in following way
•SEBI has permitted internet trading through registered stock brokers
Regulatory
Functions
•SEBI has framed rules and regulations and a code of conduct to regulate the
intermediaries such as merchant bankers, brokers, underwriters, etc.
•These intermediaries have been brought under the regulatory purview and
private placement has been more restrictive.

6. SEBI is working as a
corporate sector.
Its activities are divided
into five departments.
Each department is
headed by an executive
director.
The head office of SEBI
is in Mumbai and it has
branch office in
Kolkata, Chennai and
Delhi.
SEBI has formed two
advisory committees to
deal with primary and
secondary markets.
These committees
consist of market
players, investors
association and eminent
persons.

7.  Securities & Exchange Board of India (SEBI) formed
under the SEBI Act, 1992 with the prime objective
of
◦ Protecting the interests of investors in securities.
◦ Promoting the development of, and
◦ Regulating, the securities market and for matters
connected therewith or incidental thereto.
Focus being the greater investor protection, SEBI has
become a vigilant watchdog

8. Power to call periodic returns from recognized stock exchanges.
Power to call any information or explanation from recognized stock exchanges
to their members.
Power to direct inquiries to be made in relation to affairs of stock exchanges or
their members.
Power to grant approval to bye-laws of recognized stock exchanges.
Power to grant registration to market intermediaries.
Power to levy fees or other charges for carrying out the purpose of regulation.

9. To regulate the
activities of stock
exchange.
To protect the right of
investors and
ensuring safety to
their investment.
To prevent fraudulent
and malpractices by
having balance
between self
regulation of business
and its statutory
regulations.
To regulate and
develop a code of
conduct for
intermediaries such
as brokers,
underwriters, etc.

10. To participate and to vote in annual general meetings and right to receive a
notice for them or their proxy to attend the meeting.
To receive dividend, right shares, bonus offers, from the company after there
approval of the board.
To receive and inspect minutes of the meeting.
To receive allotment letters and share certificates.
To apply for winding up of the company.
To requisition an extra ordinary general meeting.

11. Technical
Advisory
Committee
Committee
for review of
structure of
market
infrastructure
institutions
Mutual Fund
Advisory
Committee
Secondary
Market
Advisory
Committee
Takeover
Regulations
Advisory
Committee
Corporate
Bonds &
Securitization
Advisory
Committee
Primary
Market
Advisory
Committee

12.  Code of conduct:-The code of conduct has to be
strictly observed and those employees, officers, or
directors of the company who violate the code of
conduct will be subject to disciplinary action by
SEBI or by the company.
 Duty of officers:-Every listed company has to
employ a compliance officer who has to report to
MD or CEO of the company.
 Security:-Confidential files should be protected
and kept secure. These pertain to all files but
especially computer files and passwords, which are
likely to have sensitive price information.

13.  Closed trading window:-Every company should
have a closed trading window period when no trade
take places. It should be closed period when the
annual P&L and B/S have been declared, when
dividends have to be declared and amalgamations
have to made.
 Open trading window:-SEBI has also provided that
trading windows would open only after 24hours of
making sensitive price available to the public.
 Information:-To avoid insider trading practices
each listed company has to provide sensitive
information on a continuous basis to the stock
exchange.
 Problems:-SEBI deals with the problems faced by
the investors. These are dealt with the investor
grievance cell.