Banking Awareness: Important Facts About SEBI

Dear Reader, You already would have heard about SEBI – Securities and Exchange Board of India. Below are some important facts which every bank job aspirant must know.

• Securities and Exchange Board of India (SEBI) was established in 1988 as a replacement of the Controller of Capital Issues (CCI) which was the regulatory authority before SEBI.
• SEBI was given statutory powers on 12 April 1992 through SEBI Act, 1992.
• SEBI acts as the regulator for the securities market in India.
• Its Head quarters is located in Mumbai.

Objectives of SEBI:

• To regulate activities of stock exchange
• To safeguard the rights of investors and also to ensure the safety of their investment
• To prevent malpractices by balancing its self regulating business and statutory regulations
• To manage and develop a code of conduct for intermediaries

SEBI operates to fulfil the needs of the following three groups

1. Issuers – SEBI provides a market place in which they (the issuers) can raise finance fairly.
2. Investors – SEBI provides safety and supply of accurate and correct information
3. Intermediaries – SEBI provides a competitive professional market for intermediaries.

Organisational Structure of SEBI:

• A Chairman (nominated by Union Government of India)– Upendra Kumar Sinha
• 2 members – one official from the Ministry of finance (Joint Secretary, Prakash Chandra) and another from Administration of Company Act, 1956. (Secretary, Naved Masood)
• 1 official from RBI (Deputy Governor, Anand Sinha)
• 5 other members out of that 3 shall be whole time members appointed by the central government.

They are as follows:

1. Nishant Rathi – full-time member
2. Rajeev Kumar Agarwal – full-time member
3. S. Raman – full-time member
4. V. K. Jairath Magya – Part-time member
5. Raje Kumar – part-time member

Functions of SEBI:

1. Regulatory Functions are performed to regulate the business in stock exchange
   • SEBI regulates the workflow of mutual funds
   • It also conduct inquiries and audit of stock exchanges
   • It frames the rules and regulations and to develop a code conduct between intermediaries
2. Protective Functions are performed to protect the interest of investors and also safety for their investment.
   • It involves to check on Price Rigging.
   • It prohibits insider trading
   • It also prohibits fraudulent and Unfair Trade Practices
3. Development Functions are performed to develop the activities of stock exchange and improve the business.
   • It gives training for intermediaries of the securities market
   • It promotes the activities of stock exchange

Some of the Committees formed by SEBI are as follows:

• Alternative Investment Policy Advisory Committee (AIPAC)
• Risk Management Review Committee (RMRC)
• Takeover Regulations Advisory Committee
• Technical Advisory Committee
• Primary Market Advisory Committee (PMAC)
• Depository System Review Committee (DSRC)
• Corporate Bonds and Securitization Advisory Committee (CoBoSAC)
• SEBI Committee on Disclosures and Accounting Standards (SCODA)
• Qualified Audit Report Review Committee (QARC)

If you want clarification for any doubts, please use the comments section below. Also please let us know if you have suggestions or corrections.