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SEBI The Securities and Exchange Board of India was established on April 12, 1992 in accordance with the provisions of the Securities and Exchange Board of India Act, 1992. Its main function is to stop fraudulent activities of stock market.
SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992 An Act to provide for the establishment of a Board to protect the interests of investors in securities and to promote the development of, and to regulate, the securities market and for matters connected therewith or incidental thereto.
SEBI INTRODUCTION• Formed: 12 April, 1992• Jurisdiction: Government of India• Headquarters: Mumbai, Maharashtra• Employees: 525 (in 2009)• Website: www.sebi.gov.in
BOARD MEMBERS Mr. U. K. Sinha (Chairman) Mr. Parshant Saran (Whole-Time member) Mr. V. K. Jairath (Member Appointed)
ORGANISATION CHARTNAME DESIGNATIONUpendra Kumar Sinha ChairmanPrashant saran Whole-Time MemberCA. T. V. Mohandas Pai Director, Infoysis Joint Secretary, Ministry ofDr. Thomas Mathew FinanceV. K. Jairath Member Appointed Deputy Governor, ReserveAnand Sinha Bank of India
LIST OF FORMER MEMBERSName From ToC. B. Bhave 18 February 2008 18 February 2011M. Damodaran 18 February 2005 18 February 2008G. N. Bajpai 20 February 2002 18 February 2005D. R. Mehta 21 February 1995 20 February 2002S. S. Nadkarni 17 January 1994 31 January 1995G. V. Ramakrishna 24 August 1990 17 January 1994Dr. S. A. Dave 12 April 1988 23 August 1990
HISTORY OF SEBI Initially SEBI was a non statutory body without any statutory power. However in 1995, the SEBI was given additional statutory power by the Government of India through an amendment to the securities and Exchange Board of India Act 1992. In April, 1998 the SEBI was constituted as the regulator of capital market in India under a resolution of the Government of India.
ROLE OF SEBI IN MUTUAL FUNDS SEBI notified regulations for the mutual funds in 1993. SEBI has also issued guidelines to the mutual funds from time to time to protect the interests of investors. All mutual funds whether promoted by public sector or private sector are governed by SEBI.
ROLE OF SEBI IN IPO The rules, regulations and procedures relating to public issues in India are governed by SEBI. Any company going public in India should get approval from SEBI before opening its IPO. Issuer companys lead managers submit the public issue prospectus to SEBI, provide clarification, make changes to the prospectus suggested by SEBI and get it approve. SEBI validate the IPO and make sure that document has enough information to help investors to take decision before applying shares in an IPO.
FUNCTIONS OF SEBI(1) SEBI performs following functions:a) Regulating the business in stock exchanges and any other securities markets.b) Registering and regulating the working of stock brokers, sub-brokers, share transfer agents, bankers to an issue, trustees of trust deeds, registrars to an issue, merchant bankers, portfolio managers, investment advisers.
FUNCTIONS Cont…c) Prohibiting fraudulent and unfair trade practices relating to securities markets.(2) The duty of the Board to protect the interests of investors in securities and to regulate the securities market.(3) Board have some powers as issuing commissions for the examination of witnesses or documents.
RESPONSIBILITIES OF SEBI SEBI has to be responsive to the needs of three groups, which constitute the market:a. the issuers of securitiesb. the investorsc. the market intermediaries SEBI has three functions rolled into one body: quasi-legislative, quasi-judicial and quasi-executive.
POWERS OF SEBI Investigation:I. inspect the books of accounts and call for periodical returns from recognized stock exchanges.II. inspect the books of accounts of a financial intermediaries.III. compel certain companies to list their shares in one or more stock exchanges. Cease and desist proceedings:I. prosecute and judge directly the violation of certain provisions of the companies Act.
DEPARTMENTS OF SEBI1. Market Intermediaries Regulation and supervision Department (MIRSD)2. Market Regulation Department (MRD)3. Derivatives and New Product Department (DNPD)4. Corporation Finance Department (CFD)5. Investment Management Department (IMD)6. Integrated Surveillance Department (ISD)7. Investigation Department (IVD)8. Legal Affairs Department (LAD)
PROTECTION GUIDELNES GIVEN BY SEBI Eligibility Norms For Companies Issuing Security: No company shall make any issue of a public issue of securities, unless a draft prospectus has been filed with the Board, through an eligible Merchant Banker, at least 21 days prior to the filing of Prospectus with the Registrar of Companies (ROCs). Pricing By Companies Issuing Securities: A listed company whose equity shares are listed on a stock exchange, may freely price its equity shares and any security convertible into equity at a later date, offered through a public or rights issue.
GUIDELINES Cont… Pre issue Obligations: The standard of due diligence shall be such that the merchant banker shall satisfy himself about all the aspects of offering, veracity and adequacy of disclosure in the offer documents. Contents of Offer Document: Prospectus shall also contain all material information which shall be true and adequate so as to enable the investors to make informed decision on the investments in the issue.
RECENT NEWS ABOUT SEBI (Oct 3, 2011) SEBI panel to revisit norms for IPOs, mutual funds • The Securities and Exchange Board of India (SEBI) has decided to go for a comprehensive review of the primary market processes and norms governing the mutual fund industry.• The initial public offer process review will involve further reducing the time between closure of an issue and listing. At present, listing has to be made within 12 days. To help investors make informed judgment, SEBI has already asked merchant bankers (issue managers) to reduce the size of the application form for IPOs and disclose their track record of the issues managed and their performance.
Cont…• “We want to review the process further since our basic approach is to make life easier for retail investors,” top sources in SEBI said. SEBI is also looking at cutting down the number of days it takes to clear IPO applications.• SEBI’s role will come after the committee submits its recommendations.• It has been felt there is a need to improve buying and selling of mutual fund units on the floor of stock exchanges and expanding the base of investors in mutual funds.