What is SEBI? | What is SEBI and its functions

Hi friends, in today's article we are going to know about the concept of SEBI or Securities and Exchanges Board of India. So let's discuss this.

What is SEBI?

The Securities Contract (Regulation) Act, 1956 empowers the Central Government to regulate stock exchanges in India. The Government of India realized the need for an apex or top institution to regulate Stock Exchanges and to promote an orderly growth of securities market. The full form of SEBI is Securities and Exchanges Board of India.

What is SEBI? | What is SEBI and its functions
The Securities and Exchanges Board of India became for that reason installation on April 12, 1988 through an high-quality or extraordinary notification of the Government of India in the Gazette of India. In April 1992, SEBI became made a statutory frame through an Act of Parliament.

On January  25, 1995, Securities and Exchanges Board of India Act, 1992 was amended by an ordinance to provide SEBI additional powers so that it could work even more efficiently.

Power and Functions of SEBI

• SEBI has issued guidelines to Stock Exchange to make their governing bodies more broad-based. According to those guidelines, the governing frame or body of a stock exchange should have 5 elected participants or members, now no longer extra than 4 members nominated via way of means of the Government or SEBI 3 or fewer members nominated as public representatives.

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• SEBI added the system of registration of intermediaries, along with brokers and sub-agents. The registration is on the idea of positive eligibility criteria such as capital adequacy.

• SEBI has framed rules for making the relationship between client and broker more transparent and also for segregating client and broker accounts.

• The system of periodical inspection of stock exchanges has been added via way of means of SEBI. SEBI  inspected and stock exchanges till January 1993.

• SEBI vets the provide document to make certain that every one disclosures had been made by the company in the offer report on the time company applies for list of its securities (that is shares and debentures) to the stock exchanges.

• SEBI has brought merchant banking also under its regularity framework, the merchant bankers are required to follow the code of conduct issued by SEBI in respect of pricing and premium fixation of issues.

• The abolition of the office of Controller of Capital Issues has caused the elimination of control over price and premium of shares to be issued. However, companies can technique capital market, only after clearance via way of means of SEBI.

• SEBI has added a code of advertisement for public issues for making sure honest and truthful disclosures. Companies are required to reveal all material information and specific risk factors related to their projects while making public issues.


So friends, this was the concept of SEBI. Hope you get the full details about it and hope you like this article.

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