The Securities and Exchange

Board of India
( The Indian Capital Market Regulator)

The SEBI came into by an act of Parliament

to:

Objectives:
To Protect the interests of investors in
securities
To Promote the development of and to
regulate the securities market

Functions of the SEBI Board:

a. Regulating the business in stock
exchanges and any other securities
market
b. Registering and regulating the
working of stock brokers, sub-brokers,
share transfer agents, bankers to the
issue, trustees of trust deeds, registrars
to an issue, merchant bankers,
underwriters, portfolio managers,
investment advisers and such other
intermediaries who may be associated
with securities markets in any manner.
c.Registering and regulating the working
of depositories, participants, custodians
of securities, foreign institutional
investors, credit rating agencies
d. Registering and regulating the
working of venture capital funds and
collective investment schemes including
mutual funds
e. Prohibiting fraudulent and unfair
trade practices relating to securities
markets
f. Providing insider trading in securities
g. Regulating substantial acquisition of
share and take over of companies
h. Calling for information from,
undertaking inspection, conducting
inquiries and audits of the stick
exchanges, mutual funds and other
persons associated with the securities
markets
i. Levying fees and other charges

Powers of the Board: ( SEBI Board):

The board is entrusted with the same
powers as are vested in a civil court in
respect of the following matters:
 1. To seek production of books of
account and other documents at such
place and such time as may be
specified by the board.
2. Summoning and enforcing the
attendance of person and examining
them on oath
3. Inspection of any books, registers
and other documents of stockbrokers,
sub- brokers and share transfer agents,
etc.

Establishment of Securities Appellate

Tribunals:
Under the SEBI Act, the Central government
shall by notification, establish one or more
Appellate Tribunals to hear appeals.
However, appeals against the decision of
Securities Appellate Tribunal can be
preferred before a High Court.

Strengthening of SEBI:
In January 1995 & 2002, The Central
government promulgated an Ordinance to
amend the SEBI, Act 1992.
SEBI can impose monetary penalties on
capital market intermediaries and other
participants for a listed range of violations
upto 25 crores or three times the profits of
the entity for violations.
Search and Seize documents: Armed
with a search warrant from a judicial
magistrate, can conduct search operations
of the entitys premises and even seize
documents.
Freeze Bank Accounts: Armed with
authorisation from judicial magistrate, can
freeze bank accounts of the entity.
More Board Strength: The strength of the
SEBIs board has been increased from six to
nine of which three ( excluding Chairman)
will have to be full time directors.

Primary Market Reforms:

1. Relating to new issues: Companies
issuing capital in the primary market are
required to disclose all material facts and
specific risk factors regarding the
projects.
 2. Freedom to fix Par value of shares
3. Relating to IPOs: the issuer has to
disclose the price, the issue size and the
number of securities to be offered to the
public.
For other details please go through page
446 to 450 of text book.