SEBI means the Securities and Exchange Board of India. It is the creation of an Act of Parliament. SEBI was established in year 1988 and was given statutory powers in 1992 with SEBI Act 1992. The Board has two primary objectives – investor protection and securities market regulation.
Powers
The Board is called upon to monitor and regulate the functioning of three major players in the capital market – the investors, the market intermediaries and the issuers of capital market instruments.
SEBI has been invested with power to:
- regulate stock exchanges and other financial securities markets;
- encourage the development of and regulate self-regulatory industry bodies;
- register and regulate the activities of brokers, sub-brokers, and other market intermediaries,;
- investigate fraudulent trade practices and unfair transactions and order imposition of penalties on investors, intermediaries, stock exchanges, issuers of capital market instruments, self-regulatory organizations, etc.
Decisions of SEBI
The Board has extensive quasi-judicial and punitive powers but these are subject to appeal. At the first instance, an appeal lies to the three members Securities Appellate Tribunal. For a second appeal, a suit is to be filed in the Supreme Court of India.
Conclusion
SEBI has played an important role in fostering transparency in the capital markets, stabilizing their operations and promoting market efficiency.
