What Is SEBI and What Are Its Functions?

SEBI, the Securities and Exchange Board of India, is a pivotal regulatory body overseeing and regulating the Indian securities market. Established on April 12, 1988, as a non-statutory body for regulating the securities market, it was given statutory powers on January 30, 1992, through the SEBI Act of 1992 by the Government of India.

Primary Functions and Objectives of SEBI:

• Protection of Investors: One of SEBI's fundamental objectives is to protect the interests of investors in securities. This involves ensuring fair and transparent practices and addressing investors' grievances.

• Regulating Entities: SEBI oversees the activities and functioning of various market intermediaries, including stock exchanges, brokers, portfolio managers, investment advisors, and mutual funds, ensuring they operate within the stipulated legal framework.

• Promoting and Regulating the Securities Market: It aims to promote the development of the securities market and regulate the business in stock exchanges and any other securities market to facilitate the growth of the industry.

• Prohibition of Fraudulent Practices: It actively works to prohibit fraudulent and unfair trade practices relating to the securities market, thus maintaining market integrity.

Powers of SEBI:

To fulfill its roles and objectives efficiently, SEBI is endowed with three key powers:

1. Quasi-legislative: SEBI has the authority to draft regulations in its legislative capacity that it believes are necessary to protect the interests of investors as well as the securities market.

2. Quasi-judicial: In its judicial capacity, SEBI can conduct hearings and adjudicate disputes among players and intermediaries in the securities market. It can issue rulings in matters related to the securities market, which are binding on the parties involved.

3. Quasi-executive: SEBI exercises its executive powers through actions such as conducting investigations and inspections, enforcing compliance with its rules and regulations, and taking appropriate action to safeguard market integrity.

Significant Regulations and Guidelines by SEBI:

SEBI has introduced several regulations and guidelines to ensure the smooth functioning of the securities market in India. These include:

• SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015: Enhances transparency between stock exchanges and listed companies.

• SEBI (Prohibition of Insider Trading) Regulations, 2015: Aims to prohibit trading in securities by individuals who have undisclosed price-sensitive information.

• SEBI (Mutual Funds) Regulations, 1996: Regulates the functioning of mutual funds to protect the interests of investors.

Impact of SEBI on the Indian Securities Market:

Since its establishment, SEBI has significantly contributed to creating a market environment that is more transparent, efficient, and investor-friendly. Its efforts have increased investor confidence, encouraged the flow of capital to the markets, and promoted the healthy development of the Indian securities market.

Conclusion:

As a watchdog of the securities market in India, SEBI plays a critical role in shaping the market's infrastructure and protecting investor interests. Through its comprehensive regulatory framework and vigilant oversight, SEBI has become an essential pillar in the Indian financial system, fostering its growth while ensuring stability and transparency.