Study Material

1. SEBI

2. Module 7 – SEBI
• Topics
– SEBI – Regulatory Body for the Capital Market
– Recent Guidelines

3. SEBI

4. Capital Market Regulator- SEBI
• The Capital Market is regulated by
Securities and Exchange Board of India
(SEBI). It has full autonomy and authority
to regulate and develop the capital market.

5. Capital Market- 4 Legislation
• The four main legislations governing the
capital market are as follows :
– The SEBI Act, 1992 – establishes the SEBI with
four fold objectives of
• protection of the interests of investors in securities,
• development of securities market,
• regulation of the securities market and
• matters connected therewith and incidental thereto.

6. Capital Market- 4 Legislation– The Companies Act, 1956 which deals with
• issue, allotment and transfer of securities,
• disclosure to be made in public issues,
• underwriting,
• rights and bonus issues and
• payment of interest and dividends
– The Securities Contracts (Regulation) Act, 1956 which
provides for
• regulations of securities trading and
• the management of stock exchanges
– The Depositories Act, 1996 which provides for
• establishment of depositories for electronic maintenance and
• transfer of ownership of demat securities.

7. SEBI- Objectives
• SEBI got legal teeth through ordinance issued in
January 30, 1992. The objectives defined by the
ordinance for the board were –
– Investor protection
– Promotion and development of capital market
– Regulating the functioning of the securities market
• The SEBI works under the Ministry of Finance(MoF). It
has been given a status of an independent
organisation regulating each and every aspec of the
securities market backed by a statute and accountable
to the parliament.

8. SEBI - Functions
• Powers and Funcions of the SEBI – Section 11(1) of
the ac casts upon the SEBI the
– Duty to protect the interests of investors in securities and
– To promote the development of and to regulate the
securities market through appropriate measures. These
measures provide for the following :
– Regulating the business in stock exchanges and any other securities
market.
– Registering and regulating the working of stock brokers, sub brokers,
share transfer agents, bankers to an issue, trutees of trust deeds,
registrar to an issue, merchant bankers, underwriters and other such
intermediaries who may be associated with the securities market in any
manner

9. SEBI - Functions
• Prohibiting fraudulent and unfair trade pracices in
the securities market
• Promoting investor education and trading of
securities in securities market
• Prohibiting insider trading in securities market
• Performing such other functions as may be
prescribed by the government.

10. SEBI – Recent Guidelines
• The Recent guidelines of SEBI include the
following
– SEBI (Employee Stock Option Scheme and
Employee Stock Purchase Scheme) Guidelines,
1990
– SEBI (Disclosure and Investor Protection)
Guidelines, 2000
– SEBI (Delisting of Securities) Guidelines, 2003

11. Rohit Kochhar