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SEBI

A statutory regulatory body was established in 1992 in order to protect the investors by setting up guidelines and managing the commodity market in India.

What is SEBI?

The SEBI is the board for securities and exchange in India. It was first established in 1988 as a non-statutory body to regulate the securities market. However, it became an autonomous body in the year 1992 with the passing of the SEBI Act 1992 by the parliament of India. It has its headquarters in Mumbai and regional offices in Kolkata, New Delhi, Chennai and Ahmedabad. In addition, local offices are set up in different states of India to monitor the commodity market and take necessary actions. The regulation of the Indian financial market is made with the coordination of 20 departments of the regulatory body.

Members of SEBI

The Union Government of India appoints the chairman of the body along with five other members, out of which three are supposed to be whole-time members. In addition, two members are selected from the Union Finance Ministry and one from the Reserve Bank of India.

SEBI Recruitment

To appear for the SEBI Assistant Manager Grade post, there are a few SEBI recruitment criteria one must follow. Any person appearing must be a citizen of India or Nepal/Bhutan/Bangladesh with a valid certificate from the government of India. 

Roles and Responsibilities

As per the SEBI full form, its primary role is to regulate and monitor the security issues and investors and protect their interests. The body, by drafting specific regulations, exercises its legislative powers. Furthermore, it can initiate investigations with the help of its executive powers and pass orders to utilise its judicial capacity. In addition, the regulatory body has certain powers to ensure the smooth functioning of the financial market. 

  • Firstly, it can approve by-laws related to security exchange
  • Ensuring that securities exchange abide by the laws approved
  • Monitor the book of accounts and demand periodical return from time to time
  • To ensure registration of brokers and sub-brokers

There are various committees that help implement and supervise the regulations and activities. Mutual Fund Advisory Committee, Technical Advisory Committee, Corporate Bonds and Securitisation Advisory Committees are some of the popular committees. 

SEBI has been instrumental in taking effective steps, and in order to deal with global meltdown, it has liberalised takeover code. It has also increased the retail investors limit to a whopping 200,000 from 100,000.

SEBI Regulations

Since 1992, various regulations have been passed and are continuing. Some of the latest SEBI regulations deal with the delisting of equity shares. Regulations spread from portfolio managers, foreign portfolio investors, vault managers to the appointment of administrators for the procedure of refunding to the investors. Various settlement proceedings, securities contracts, infrastructure investment trusts, real estate investment trusts, and KYC issues fall under the regulatory actions of the body. The latest regulation ( 2021 ) deals with sorting out the central database of market participants.

Derecognition of Securities Exchanges

Due to a hike in the illiquid nature of trade on many securities exchanges, a few guidelines were passed in 2012 for the latter to either meet the criteria or take an exit. The process of derecognition of the securities exchange is as follows.

  1. Securities, whose annual trading turnover is less than 10 billion rupees, can apply for a voluntary exit before two years of passing this circular.
  2. Exchanges could seek voluntary surrender.
  3. Securities, which are already derecognised, must apply for exit within two months of passing these guidelines. 
  4. On failure of derecognition by the exchanges even after two years and unsuccessful in achieving the prescribed turnover, the statutory body will take action for compulsory derecognition.

Conclusion

SEBI has witnessed success by forcing systematic reforms and must be appreciated for implementing various settlement cycles and making markets electronic and paperless. They are actively working to establish regulations required under the law. SEBI has kept the goal clear and invested in protecting issuers of securities, investors, and market intermediaries. It has issued guidelines complementing International standards.