Security Exchange Board of India (SEBI)
SEBI is a body corporate with head office at Bombay. The Chairman and the board members are appointed by the Central government. SEBI has two following major functions:
1. Regulatory and
a). Registering the brokers and sub-brokers b). Registration of mutual funds c). Regulation of stock exchanges d). Prohibition of fraudulent and unfair trade practice e). Controlling insider-trading, take-over bids and imposing penalties.
2. Development a. Educating investors b. Training intermediaries in stock market transactions c.
Promoting fair transactions d. Undertaking research and publishing useful information to all
Ø To deal with development and regulation of stock market in India.
Ø To promote fair dealings by the issue of securities and ensure a market place where they can raise funds.
Ø To provide protection to the investors.
Ø Regulate and develop a code of conduct for brokers, merchant bankers, etc.
Ø To have check on preferential allotment to promoters at a very low price.
Ø To prevent deviations and violations of rules prescribed by stock exchange.
Ø To verify listing requirements, listing procedures, and ensure compliance of the same by the companies, so that only financially sound companies are listed.
Ø To prescribe required standards for merchant bankers.
Ø To promote healthy growth of security market for the development of capital market in
Powers of SEBI as per the Act, SEBI has powers
Ø To file complaints in a court
Ø To regulate companies in the issue and transfer of shares including bonus and rights shares.
Ø It can levy penalties on companies and on brokers for violating transactions.
Ø Power to summon any broker or intermediaries and call for documents.
Ø It can issue directions to all brokers for protecting the interests of investors.
In addition to the above powers:
Ø It can call for periodical returns from stock exchange.
Ø Seek any information from stock exchange.
Ø It can enquire into the functioning of stock exchange.
Ø It can grant permission for the change of bye-laws of any stock exchange.
Ø It can compel listing of securities of public company.
Ø It can control and regulate stock exchanges.
Ø Granting registration to market intermediaries, prohibit insider-trading and prohibit Fraudulent and unfair trade practices.
Ø Promoting investor-education, and trading of intermediaries in capital market.
Ø Regulating purchase of shares and take-over of companies.