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Meaning and purpose
The Securities and Exchange Board of India (SEBI) is the country’s most prominent securities regulator. The Securities and Exchange Commission (SEC) of the United States has a counterpart in SEBI. “To protect the interests of investors in securities, to promote the growth of, and to regulate the securities market, and for matters associated with or incidental thereto,” according to the organisation’s mission statement.
The Securities and Exchange Board of India (SEBI), similar to the Securities and Exchange Commission in the United States, is India’s primary securities market regulator. SEBI has broad regulatory, investigation, and enforcement capabilities, as well as the capacity to levy fines against violators. Some criticise SEBI for lack of transparency and direct public accountability for an entity with such vast powers.
Creation of SEBI
Following the passing of the Securities and Exchange Board of India Act by the nation’s parliament in April 1992, the Securities and Exchange Board of India was founded in its current form.
It took the place of the Controller of Capital Issues, which had governed the securities markets under the Capital Issues (Control) Act of 1947, which had been passed just months before India’s independence from the British.
In Mumbai’s Bandra-Kurla Complex, the SEBI headquarters are located in the business district. It has regional offices in New Delhi, Kolkata, Chennai, and Ahmedabad, as well as over a dozen local offices in Bangalore, Jaipur, Guwahati, Patna, Kochi, and Chandigarh.
Role of SEBI
This regulatory authority operates as a watchdog for all capital market participants, and its principal goal is to create an atmosphere for financial industry lovers that makes the securities market more efficient and smooth.
1. Securities issuers
These are corporate entities that raise capital from a variety of sources in the market. This organisation ensures that they have a safe and transparent environment in which to operate.
2. Investor
Investors are the ones who keep the financial markets afloat. This regulatory authority is in charge of ensuring a free-of-misconduct environment in order to regain the trust of the general public, who invest their hard-earned money in the markets.
3. Intermediaries in the Financial Sector
These are the individuals who act as intermediaries between issuers and investors. They ensure that financial transactions are simple and secure.
Objective of SEBI
The Stock Exchange Board of India’s goals are as follows:
1. Investors are protected
SEBI’s main goal is to safeguard investors’ interests in the stock market and to create a healthy environment for them.
2. Malpractice prevention
SEBI was established for this reason. It is an important factor.
3. Effectiveness and fairness
SEBI is in charge of ensuring the smooth operation of capital markets and keeps a careful eye on the actions of financial intermediaries such as brokers, sub-brokers, and others.
Responsibilities of SEBI
1. Enforcement: SEBI has broad powers and authority to enforce the Securities Contracts Act of 1956, the Depositories Act of 1996, BIFR (Bankruptcy laws), and various central government directives.
2. Appointment of officers/workers: It has the authority to select its own officers or employees, as well as co-opt any government officer as an officer.
3- Investigation: It has the authority to conduct investigations under the Act’s provisions or to investigate incidents on its own.
4. Other Authorities’ Subordination to SEBI: Any person, authority, or authority establishing any schemes, regulating, or controlling any markets may place themselves under SEBI’s control.
5. Financial Assistance: The Board can provide funds to SEBI sub-committees for investigations and other purposes.Power of search and seizure.
Powers of SEBI
1. SEBI has the authority to search any premises or place where it believes any books of accounts, documents, vouchers, computer discs or storage devices used in connection with the securities market are maintained and to confiscate them if necessary, under Section 10.
It has the authority under Section 11 of the Act to issue search warrants for any location or premises occupied by a person reasonably suspected of having committed an offence punishable under the Act, and so on.
2. SEBI has the power to arrest without a warrant anyone who has committed an offence punishable under the Act, according to Section 12. Any officer of SEBI or any other police officer not lower in rank than an AssistantSuperintendent of Police may arrest without a warrant anyone who has committed an offence punishable under the Act.
3. Power of service or attachment: SEBI, or any officer authorised by it in this capacity, has the authority to serve a copy of any order made by it on the concerned person through its officers, as well as attach their property pending the outcome of any proceedings under the Act.
4. Appointment of officials and others: Under Section 19, SEBI may appoint its officers, employees, and others as necessary to carry out the Act’s functions. It can also appoint any government or law enforcement personnel as a SEBI officer.
5. Power to make regulations: The Board may make rules consistent with the Act for carrying out the Act’s purposes, with the prior approval of the Central Government, by notification in the Official Gazette. The ‘Securities and Exchange Board of India (Futures Trading) Regulations, 2004’ are the rules in question.
6. SEBI has the power to grant sanctions: Under Section 21, SEBI has the power to grant sanctions to initiate any proceedings before the Appellate Tribunal or even to sanction prosecution under the Act by itself. It preserves a detailed record of all proceedings that come before it.
Capital market
A capital market is a location where buyers and sellers of financial securities such as bonds, stocks, and other securities engage in trading (buying and selling). Individuals and institutions are among those who engage in trading. Long-term securities are mostly traded on the capital market.
The scale of a country’s capital markets is directly proportional to its economy, meaning that small ripples in one area might generate massive waves in another.
Types of the capital market
The primary market is where fresh securities or shares are sold. A primary market is one in which a corporation sells new securities to investors in exchange for cash (buyer). It deals with the purchase and sale of fresh stock offerings and other securities by investors. Market of Seconds
A secondary market is a place where investors can trade currencies or previously issued securities. After new securities are sold in the primary market, they must be able to be resold in an efficient manner. Investors can resell or exchange their current securities in secondary markets.
Conclusion
SEBI regulates all participants in the Indian capital market. By enforcing numerous laws and regulations, it tries to protect investors’ interests while also attempting to expand financial markets.
