Securities and
Exchange Board of India
The Securities and Exchange Board of India (frequently abbreviated SEBI) is the regulator for the securities market in India. It was established in the year 1988 and given statutory
powers on 12 April 1992 through the SEBI Act, 1992.
Initially SEBI was a non statutory body
without any statutory power. However in the year of 1995, the SEBI was given
additional statutory power by the Government of India through an amendment to
the Securities and Exchange Board of India Act 1992. In April, 1988 the SEBI
was constituted as the regulator of capital markets in India under a resolution
of the Government of India.
Functions and responsibilities
The Preamble of the Securities and Exchange Board of India
describes the basic functions of the Securities and Exchange Board of India as
"...to protect the interests of investors in securities and to promote the
development of, and to regulate the securities market and for matters connected
therewith or incidental thereto".
SEBI has to be responsive to the needs of three groups, which
constitute the market:
·
the issuers of
securities
·
the investors
·
The market
intermediaries.
SEBI 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 in its judicial capacity.
Though this makes it very powerful, there is an appeal process to create
accountability. There is a Securities Appellate Tribunal which is a
three-member tribunal and is presently headed by Mr. Justice J P Devadhar, a
former judge of the Bombay High Court. A second appeal lies directly to
the Supreme Court.