Securities And Exchange Board Of India

India is a country which has entered the world of the active stock market for more than half a century now and there has been major growth and development in it. Besides that, the stock market of India has faced a lot of hurdles in the way to becoming what it is today. During the initial years of the stock exchange, there were innumerable frauds in capital and funds and major scams were faced by various banks as well as common people. 

Many shell companies were created and out of that, many people lost their money. There was a lot of instability in the market and the trust in stocks was decreasing with every passing day. Everyone knows that the stock exchange is the core of the commercial world and it is very important to strengthen it by eradicating fraudulent activities as well as irregularities. For this purpose, SEBI was formed and as of today, it is the most efficient body which monitors stock exchanges in India.

Historical Background and Structure 

SEBI is the acronym for Securities and Exchange Board of India which was incorporated in the year 1988 as a component of the ministry of finance. It was a non-statutory body during the time of its inception but was later converted into an autonomous body in the year 1992. It was the same year when India faced its stock exchange scam. SEBI was formed as an autonomous body through the SEBI Act, which was passed in the parliament and works as per the specifications in this act. Its headquarters lies in Mumbai, the city with the largest stock exchange in India and has its various divisions in some major cities of the country, such as Delhi, Chennai and Kolkata. 

The current head of SEBI is Madhabi Puri Buch, who has been in office since March 1st, 2022, who also happens to be the first woman chairman Of SEBI. There are various full time as well as part-time members in SEBI and it consists of various departments which work in various areas such as corporate, economics, hybrid securities, and Information technology. e.t.c

Role of SEBI 

SEBI is the authority which manages and disciplines the stock exchange in India along with working towards its overall growth and development. The existence of SEBI is also one of the major factors behind the trust, in which people have built-in stocks and investments over a period of a few decades. There are some crucial roles of SEBI towards various groups of people involved in the stock market.

(i) Investor- The whole security exchange market revolves around the monetary transactions and money flow, which happens because of investors. One of the primary reasons behind the existence of SEBI is the fraudulent activities which lead to major losses for investors. It works towards the rational and unbiased structure of the securities market.

(ii) Stock Brokers- These are the intermediaries who act as a link between the investor and the issuer of securities and enable a hassle-free and easy translation in the market. SEBI  also works toward rights and keeps an eye on all these people.

(iii) Issuer of Securities- The issuer of securities is the one who needs funds and the reason behind the existence of the stock exchange. SEBI issues various guidelines and helps them in every possible way.

Functions of SEBI

SEBI is the guard of the stock exchange in India and plays a significant role in the monitoring and development of all the activities which take place in the stock market. The various functions of SEBI  are discussed below.

(i) Regulation- The stock exchange is a large market and connects the whole country in the corporate sector. Besides, there are foreign investments pouring in from all over the world as India has a very active and growing market with a stable structure. Among all this, the chances of manipulation and fraud rise a lot, with many big players wanting to take it over. SEBI  maintains the balance in the market and avoids any kind of manipulation, fraud or illegal domination.

(ii) Protection- There are players of all kinds and all sizes in the market and SEBI  protects the interest of all. In its absence, chances are there that all of it will become a hunting game where large conglomerates and brokers might destroy or eradicate the small ones.

(iii) Development- A stagnant market is a declining market. It is very important to stay updated and malleable as per the growing needs of the whole world. SEBI ensures that the Indian stock exchange is not lagging behind in any aspect from all over the world. 

Objectives of SEBI

SEBI  manages the whole stock market with rationality and unbiased behaviour. This is the reason for its growth and stability. Its major objective is to protect all the parties involved in the stock market and avoid any malpractices. It ensures that none of the sides faces any kind of turbulence in transactions as well as the smooth functioning of the market with the limits set by the government.

Conclusion

SEBI is the watchdog of the Indian stock exchange, which keeps an eye on all the elements as well maintains discipline in the market. Its presence has enabled growth, development and stability in the Indian market, which has also attracted foreign investments. It is the backbone of fair trade in Indian securities.