The Securities and Exchange Board of India (frequently
abbreviated SEBI) is the regulator for the securities market in India. It was
established on 12 April 1992 through the SEBI Act, 1992.
It was officially established by The Government of India in
the year of 1992 with SEBI Act 1992 being passed by the Indian Parliament. SEBI
is having it's Headquarter at the business district of Bandra Kurla Complex in
Mumbai, and has Northern, Eastern, Southern and Western Regional Offices in New
Delhi, Kolkata, Chennai and Ahmedabad respectively.
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 the year of 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. In April, 1998 the SEBI was
constituted as the regulator of capital markets in India under a resolution of
the Government of India.
The SEBI is managed by its members, which consists of
following: a) The chairman who is nominated by Union Government of India. b)
Two members, i.e. Officers from Union Finance Ministry. c) One member from The
Reserve Bank of India. d) The remaining 5 members are nominated by Union
Government of India, out of them at least 3 shall be whole-time members.
The office of SEBI is situated at SEBI Bhavan, Bandra Kurla
Complex, Bandra East, Mumbai- 400051, with its regional offices at Kolkata,
Delhi,Chennai & Ahmadabad. It has recently opened local offices at Jaipur
and Bangalore and is planning to open offices at Guwahati, Bhubaneshwar, Patna,
Kochi and Chandigarh in Financial Year 2013 - 2014.
Upendra Kumar Sinha was
appointed chairman on 18 February 2011 replacing C. B. Bhave.
Functions and
responsibilities
SEBI
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: quasi-legislative, 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 appeal 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
Powers
For
the discharge of its functions efficiently, SEBI has been invested with the
necessary powers which are:
- to approve by−laws of stock exchanges.
- to require the stock exchange to amend their by−laws.
- 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.
- power to impose monetry penalties.