With the growth of dealings in stock markets, emerged lot of misconducts like late delivery of shares, price rigging and violation of regulations which ultimately resulted in customers losing faith in the stock exchange. InSEBI was set up for regulating securities market. Earlier SEBI was ineffective in controlling and regulating such activities and was a mere watch dog. SEBI is managed by members consisting of chairman nominated by Government of Indiaa member from RBI, 2 officers from finance ministry and 5 members nominated by Indian government 3 being the whole time members.
Read SEBI departments for your reference.
Objectives of SEBI To provide a transparent and healthy platform for corporates to raise funds from the financial market To create and enforce bye-laws for corporates and financial intermediaries To protect the rights of investors and ensure the safety of their investment Listen and provide a support system for investor grievances Promote and develop the financial market of India What is the main role of SEBI in financial market of India?
SEBI was established to regulate the financial market of India. To achieve this objective, it takes care of three most important entities of financial market viz.
Issuers of securities These are corporate entities which raise funds from the financial market. SEBI ensures that they get a transparent and healthy environment for their needs. Investor These are the ones who keep the financial market alive.
Financial Intermediaries These intermediaries act as a mediator in the financial market. Their presence brings smoothness and safety in financial transactions. Protective functions SEBI performs the following functions to provide a safe and transparent environment for investors, who keep the financial market alive.
These protective functions are — Prevent price rigging One of the most important objectives behind the establishment of SEBI was to stop manipulated huge fluctuations in the financial market.
In-fact by studying historical fluctuations, several theories have emerged to predict the trend.
These theories are collectively called as Technical Analysis TA and today very popular among traders. SEBI keeps strict surveillance to prevent such price riggings. Introduction of circuits is one of them.
If a security price goes beyond this defined circuit thresholda circuit breaker comes into action and trading on that security is halted for some time or the whole day.
Prohibit insider trading This can be seen as a part to prevent price rigging. This is called insider trading. SEBI also asks listed companies to disclose all their existing employee benefit schemes involving the stock purchase and align them in accordance with its ESOS and ESPS guidelines within a given timeframe.
Financial education for Investors SEBI conducts various online and offline seminars through various mediums to educate the traders and investors. This education starts from basics of financial market and covers money management as well.
SEBI guidelines There are several other unfair practices which can be used by the corporates and others to manipulate security markets.
SEBI makes sure that these are prevented beforehand by enforcing its bye-law guidelines. Developmental functions Developmental functions refer to the SEBI initiatives which bring fresh breathe and innovations in Indian financial market.
Developmental functions include but not limited to Introduction of electronic platform for financial market DEMAT form of securities.There are two kinds of markets where borrowing and lending of money takes place between fund scarce and fund surplus individuals and groups.
The markets catering the need of short term funds are called Money Markets while the markets that cater to the need of long term funds are called Capital Markets. ESTABLISHMENT OF SEBI.
The Securities and Exchange Board Of India was established on 12 April, in accordance with the provisions of the Securities and Exchange Board of India Act, WELCOME TO OUR WEBSITE MKPS & Associates was established in the year We believe in upholding Excellence in Professional services and our endeavour is .
SEBI’s Preamble describes in detail the functions and powers of the board. Its Preamble states that SEBI must “protect the interests of investors in securities and to promote the development of, and to regulate the securities market and for matters connected there with or incidental there to.”.
Read this article to learn about the purpose, objective and functions of SEBI! Securities Exchange Board of India (SEBI) was set up in to regulate the functions of securities market.
SEBI promotes orderly and healthy development in the stock market but initially SEBI was not able to exercise. Protective functions of SEBI As clear from the name, SEBI’s protective function is to protect investors’ interest and provide them security by taking following actions: Manipulation of security prices to inflate or depress the market prices (price rigging) and thereby cheating investors is prohibited by SEBI.