Securities and Exchange Board of India

WHY IN NEWS?

The Securities and Exchange Board of India (SEBI) has reduced certain reporting timelines for rights issues.

ABOUT SEBI

• The Securities and Exchange Board of India (SEBI) is the regulator for the securities market in India owned by the Government of India.
• The Securities and Exchange Board of India was established on April 12, 1992 in accordance with the provisions of the Securities and Exchange Board of India Act, 1992.
• Securities and Exchange Board of India (SEBI) was first established in 1988 as a non-statutory body for regulating the securities market.
• SEBI caters to the needs of three parties operating in the Indian Capital Market. These three participants are mentioned below:
  • Issuers of the Securities: Companies that issue securities are listed on the stock exchange. They issue shares to raise funds. SEBI ensures that the issuance of Initial Public Offerings (IPOs) and Follow-up Public Offers (FPOs) can take place in a healthy and transparent way.
  • Protects the Interests of Traders & Investors: It is a fact that the capital markets are functioning just because the traders exist. SEBI is responsible for safeguarding their interests and ensuring that the investors do not become victims of any stock market fraud or manipulation.
  • Financial Intermediaries: SEBI acts as a mediator in the stock market to ensure that all the market transactions take place in a secure and smooth manner. It monitors every activity of the financial intermediaries, such as broker, sub-broker, NBFCs etc.
• Securities and Exchange Board of India has the following three powers:
  • Quasi-Judicial: With this authority, SEBI can conduct hearings and pass ruling judgements in cases of unethical and fraudulent trade practices. This ensures transparency, fairness, accountability and reliability in the capital market.
  • Quasi-Legislative: Powers under this segment allow SEBI to draft rules and regulations for the protection of the interests of the investor.
  • Quasi-Executive: SEBI is authorized to file a case against anyone who violates its rules and regulation. It is empowered to inspect account books and other documents as well if it finds traces of any suspicious activity.

Prelims Question

Q. Which of the following statements regarding Securities and Exchange Board of India (SEBI) is/are correct?
1. It is a statutory body
2. It has quasi-judicial powers
Select the correct answer using the code given below:
a. 1 only
b. 2 only
c. Both 1 and 2
d. Neither 1 nor 2

Answer to the Prelims Question