INDEX

S. No.
1 2 3 4 5 6 7 8 9 10 11 12

TITLE
Introduction SEBI Objectives of SEBI Functions of SEBI Duties Powers SEBI committees Organizational Structure SEBI operations Other Functions Conclusion Bibliography

Page No.
2 3 3 4 4 5 5 6 7 9 13 14

Remark s

INTRODUCTION

The Securities and Exchange Board of India (frequently abbreviated as SEBI) is the regulator for the securities market in India. It was established on 12 April 1992 through the SEBI Act, 1992. The need for setting up independent Govt. agency to regulate and develop the Stock and Capital Market in India as in many developed countries was recognized since the Sixty Five Year Plan was launched (1985) when some major industrial policy changes like opening up of the economy to outside world and greater role to the Private Sector were initiated. The rampant malpractices noticed in the Stock and Capital Market stood in the way of infusing confidence of investors which is necessary for mobilization of larger quantity of funds from the public and help the growth of the industry.

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 The SEBI, that is, the Securities and the Exchange Board of India, is the national regulatory body for the securities market, set up under the securities and Exchange Board of India act, 1992, to protect the interest of investors in securities and to promote the development of, and to regulate the securities market and for matters connected therewith and incidental too.

Controller of Capital Issues was the regulatory authority before SEBI came into existence; it derived authority from the Capital Issues (Control) Act, 1947. Initially SEBI was a non statutory body without any statutory power. However in 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.

SEBI has its head office in Mumbai and it has now set up regional offices in the metropolitan cities of Kolkata, Delhi, and Chennai.

OBJECTIVE OF SEBI:
The SEBI has been entrusted with both the regulatory and developmental functions. The objectives of SEBI are as follows: a. Investor protection, so that there is a steady flow of savings into the Capital Market. b. Ensuring the fair practices by the issuers of securities, namely, companies so that they can raise resources at least
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cost. c. Promotion of efficient services by brokers, merchant bankers and other intermediaries so that they become competitive and professional.

FUNCTIONS OF SEBI:

As per the SEBI act, 1992, the power and functions of the Board encompass the regulation of Stock Exchanges and other securities markets.It 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: quasilegislative, 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 appeals process to

create accountability. There is a Securities Appellate Tribunal which is a three-member tribunal and is presently headed by a former Chief Justice of a High court - Mr. Justice NK Sodhi. A second appeal lies directly to the Supreme Court.

SEBI as the watchdog of the industry has an important and crucial

role in the market in ensuring that the market participants perform their duties in accordance with the regulatory norms.

The Stock Exchange as a responsible Self Regulatory Organization

(SRO) functions to regulate the market and its prices as per the prevalent regulations.

SEBI and the Exchange play complimentary roles to enhance the

investor protection and the overall quality of the market.

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 DUTIES OF SEBI:

Regulation of Stock Exchanges and other securities markets; Registration and regulation of the working stock brokers, subbrokers, bankers to an issue (a public offer of capital), trustees of trust deeds, registrars to an issues, merchant bankers, under writers, portfolio managers, investment advisors and such other intermediaries who may be associated with the stock market in any way; Registration and regulations of mutual funds; Promotion and regulation of self- regulatory organizations; Prohibiting Fraudulent and unfair trade practices and insider trading in securities markets; Regulating substantial acquisition of shares and takeover of companies; calling for information from, undertaking inspection, conducting inquiries and audits of stock exchanges, intermediaries and self- regulatory organizations of the securities market; Performing such functions and exercising such powers as contained in the provisions of the Capital Issues (Control) Act,1947 and the Securities Contracts (Regulation) Act, 1956, levying various fees and other charges, conducting necessary research for above purposes and performing such other functions as may be prescribes from time to time.

POWERS OF SEBI:
For the discharge of its functions efficiently, SEBI has been invested with the necessary powers which are:
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 To approve bylaws of stock exchanges. To require the stock exchange to amend their bylaws. Inspect the books of accounts and call for periodical returns from recognized stock exchanges. Inspect the books of accounts of a financial intermediaries. Compel certain companies to list their shares in one or more stock exchanges. Levy fees and other charges on the intermediaries for performing its functions. Grant license to any person for the purpose of dealing in certain areas. Delegate powers exercisable by it. Prosecute and judge directly the violation of certain provisions of the Companies Act,1956 and other supporting statutory regulations. Power to impose monetary penalties.

SEBI COMMITTEES:
Technical Advisory Committee Committee for review of structure of market infrastructure institutions Members of the Advisory Committee for the SEBI Investor Protection and Education Fund Takeover Regulations Advisory Committee Primary Market Advisory Committee (PMAC) Secondary Market Advisory Committee (SMAC) Mutual Fund Advisory Committee Corporate Bonds & Securitization Advisory Committee
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 Takeover Panel SEBI Committee on Disclosures and Accounting Standards (SCODA) High Powered Advisory Committee on consent orders and compounding of offences Derivatives Market Review Committee Regulation over Financial Terms of Various Authorities.

ORGANIZATIONAL STRUCTURE: The Board comprises of:

Name Designation

Upendra Kumar Sinha

Chairman

Prashant Saran

Whole Time Member

Rajeev Kumar Agarwal

Whole Time Member

Dr. Thomas Mathew

Joint Secretary, Ministry of Finance

V. K. Jairath Magya

Member Appointed

Anand Sinha

Deputy Governor, Reserve Bank of India

Naved Masood

Secretary, Ministry of Corporate Affairs

SEBI OPERATIONS:
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Throughout its eighteen-year existence as a statutory body, SEBI has sought to balance the two objectives by constantly reviewing and reappraising its existing policies and programmes, formulating new policies and crafting new regulations in areas hitherto unregulated, and implementing them to ensure growth of the market. From the above analysis and interpretation as well as other keen observation details, the researchers find out the following facts about SEBI, and its role also explained in our Indian capital market. The SEBI has introduced an array of reforms in the primary and secondary markets and catalysed modernization of the market infrastructure to prepare the market for the twenty-first century. India probably the only country in the world where all the exchanges have screen-based trading. Computerised trading has led to reduction in the scope for price-rigging and manipulation, since a paper trail can easily lead the regulators now to the doorsteps of the guilty. It is observed that , in recent times, SEBI has, retails investors limit increased to Rs. 2,00,000 from Rs. 1,00,000 in Initial Public Offererings(IPOs). Dematerialisation has pushed the process further. SEBI has taken several steps for the smooth-cum-speedy development of both primary and secondary markets from time to time for the development of all areas. Application of computerisation has also given a boost to surveillance. The basic surveillance is carried out by the stock exchanges, while the SEBI monitors the process. Introduction of price caps, price bands, circuit filters, margins
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and stock watch are some ways of keeping a strict are some ways of keeping a strict vigil on the market. Improvements have been made in the clearance and settlement system. A major step in this direction has been the establishment of depositories- NSDL and CDSLand a clearing corporationNSCCL. In recent times SEBI has taken a drastic decision for reduction of IPO's period from 21 days to12 days (IPOs issueopening and listing-period). The SEBI introduced the option of making an issue through book-building and recently it introduced ASBA scheme (in IPOs) for investment by investors through bankers. The development of mutual funds was given a major impetus, with the revision of mutual funds regulations which now provide greater operational flexibility to the fund managers and increase their accountability and supervision. Recently, it has introduced KYC norms and not charging on any entry-load on investments made by investors on NFOs or on any existing schemes. SEBI is trying its level best for availability of ULIPs at very normal and cheaper rates. The regulations for Foreign Institutional Investors (FIIs) were liberalised to provide greater flexibility and for widening the scope of their investments in the Indian securities market. Some merchant bankers were found to be unscrupulous & had taken advantage of the loopholes by concealing some facts in their prospects. The SEBI reduced the categories of merchant bankers from four to one. Moreover, it has prohibited merchant bankers from undertaking activities such as leasing, bills and discounting. To empower investors make informed decisions and facilitate fair dealing, the SEBI introduced online filing and dissemination of time sensitive price information, benchmarking or mutual fund schemes, valuation norms for unlisted scrips in mutual fund portfolios , rationalization of depository participants charges and new regulation for portfolio managers.
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 The SEBI revolutionalised the settlement system by introducing T+2 rolling settlement system scrip across exchanges. It has issued guidelines for demutualisation and corporatisation of stock exchanges. To create an effective regulatory regime in which all stakeholders have confidence, the SEBI has posted the Securities Appellate Tribunal (SAT). SAT provides a grievance redressal platform against the SEBIs orders. SEBI has introduced a number of measures to protect the interests of investors. To create awareness among issuers and intermediaries of the need to redress investor grievance's quickly, the SEBI issues fortnightly press releases, publishing the names of the companies against whom maximum number of complaints have been received. To ensure that no malpractice takes place in the allotment of shares, a representative of the SEBI supervises the allotment process. It has been issuing advertisements from time-to-time to guide and enlighten investors on various issues related to the securities market and of their rights and remedies. Investors trading times also increased.

The actions taken by the SEBI included issuing show cause notices to defaulting entities, initiating court proceedings to obtain appropriate relief in the interest of investors, conducting a special audit of the books of accounts of the larger entities, making credit rating mandatory for existing schemes, disseminating information to investors through the issue of press releases/public notices. The SEBI has introduced an automated complaints handling system to with investor complaints. It is trying utmost to combat eliminations and reduction of price rigging. In this connection it had taken action on Bank of Rajasthan towards price rigging recently. SEBI has taken some steps for educating investors from 2000-01 onwards, it distributed the booklet titled "A Quick
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Reference Guide for Investors to investors. It has published a book regarding Investor Grievances-Rights and Remedies".

OTHER FUNCTIONS: Redressal of Investor Grievances:

SEBI has instituted a process for redressing investor grievances arising from the issue procedure, from investor dealings with brokers and sub-brokers and against mutual funds. The largest number of investor grievances are caused as part of the issue process.

Compliance Officer:

In order to build up investor confidence and trust and to protect the investors, SEBI advised listed companies in July 1996 to appoint compliance officers. As of March 31, 1997, 1,431 companies reported appointment of compliance officers. These officers: (a) will liase with SEBI in matters related to investor grievance (b) will ensure implementation of the various laws, rules, regulations and other directives of SEBI by companies (c) will report to the board of the company on the status of investor complaints received through various sources - directly, stock exchanges, investor associations, SEBI and Department of Company Affairs.

NRI Cell:
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Keeping in view the objective of investor protection and also the importance of investment by NRIs, the SEBI created with effect from January 1, 1997, a separate "NRI cell" at SEBI Head Office, Mumbai to attend to the grievances that the NRI investors may have. SEBI has taken this step to give a more focused attention to and speedy redressal of the problems faced by the NRI investors in their dealings in the securities markets. The following is an illustrative list of complaints/grievances that an NRI investor may have against a listed company which they can take up with the NRI cell of SEBI for appropriate redressal: (a) (a) (c) Non receipt of refund orders/ allotment letters/ stock invest Non receipt of dividend Non receipt of debenture certificates/ interest/ redemption amount/ interest on delayed payment of interest on debentures

(b) Non receipt of share certificates/ bonus shares

(d) Non receipt of rights forms/ interest on delayed receipt of refund order.

Decentralisation of processing of investor grievances:

SEBI has set a mechanism for redressal of investor grievances arising from the issue process. Investors may send their complaints by mail or may give them in person. It was observed that several investors would travel from outside Mumbai to submit their complaints in person or to obtain guidance from SEBI staff. In order to mitigate the difficulties of the investors in approaching SEBI at its Head Office, Mumbai, the work relating to attending to investor grievances has, with effect from January 1997, been delegated to the Regional offices of SEBI at Calcutta, Chennai and New Delhi. As a measure of protecting investors' interest, SEBI had advised all stock exchanges in August 1994 that the 1% security deposit kept with them by companies who bring out the issue of
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securities will be released only after the companies concerned obtain a "No Objection Certificate" from SEBI.

Defaulting companies:
Companies with whom SEBI takes up investor grievances generally respond to and take effective steps to redress the grievances. During the year 1996-97, SEBI charted an action programme to make these companies more compliant. According to this, SEBI holds meeting with the officials of such companies and are held periodically until the redressal status becomes satisfactory.

Investor associations:
As a part of the Investor Education programme and with a view to create a greater degree of awareness among the investors throughout the country, SEBI has been registering investors associations. At the end of 1996-97, there were 8 such registered associations

Investor education/guidance:
SEBI undertakes several measures to educate and assist the investors. SEBI provides "walk-in" service at its Head Office at Mumbai and at its regional offices at New Delhi, Chennai and Calcutta on all working days. As a part of the Investor education, SEBI had issued pamphlets under Investor Guidance Series. These are being updated.

Grievance Redressal:
The grievance redressal rate of SEBI has been increasing through the years as can be seen from the following chart. The reasons for the improvement in the rate of investor grievance redressal in the current year are effective follow up with the companies, tightening of the procedure for issuing. It can be observed from the chart that the redressal rate has been consistently increasing over the years.

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Fig: Chart showing the number of investigation cases taken and completed by SEBI

Co-ordination committee:
During the year 1996-97, a meeting of the co-ordination committee on investor grievance redressal comprising of representatives of DCA, NIC, BSE and DSE besides SEBI was held in September 1996. It was decided in the meeting to develop a common software for these agencies to help better management of investor complaints.

Co-ordination with Overseas Regulators:

SEBI is a member of the International Organisation of Securities Commissions (IOSCO), and participated in its meetings at Montreal, Canada; and Warsaw, Poland. SEBI is also a member of the Development Committee of IOSCO which is the highest policy making body. Agendas have been set within IOSCO for achieving a given standard of disclosure norms, capital adequacy and compliance standards for different markets. SEBI remains committed to implementation of this agenda for ensuring that the

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fairness, integrity and transparency of Indian securities markets remain comparable to markets abroad.

CONCLUSION
The SEBI is a regulatory body which is eighteen years old and the capital market system is more than 100 years old. This matured capital market system requires monitoring rather than overregulation. The SEBI should supervise this capital market system in such a manner that all subsystems become self-regulatory organisations (SROs) gradually. The SEBI should lay down the boundaries within which these sub-systems should operate. Moreover, the fundamental infrastructure for regulation, disclosure, surveillance and trading are all in place. Hence, the SEBI should stop being pre-occupied with dayto-day regulations and become more of a visionary. The SEBI can ensure a free and fair market and take India into league of major global capital markets in the next round of reforms. To enable this, it has to thoroughly review its structure and functioning. The SEBI has to balance between the costs of regulation and market development. There should be cross-border cooperation between various regulators and between regulators and industry.

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BIBLIOGRAPHY

WEBSITES:www.sebi.gov.in www.nseindia.com www.nsdl.co.in www.wikipedia.com www.google.co.in

REFERENCE BOOKS:Financial Market Operations, by Dr. Alok Goyal, Mridula Goyal-(F K Publications) Financial Market Opertations, by B.L. Mathur, M.S. Rathore, R.K.Dave

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