SEBI ACT, 1992 Securities and Exchange Board of India, 1992 CS Executive ICSI Company Secretary

1. SECURITIES & EXCHANGE BOARD OF
INDIA ACT, 1992
CS Rishi Kakkad
+91 9173905494
csrishikakkad@gmail.com

2. SECURITIES LAW
SCR ACT, 1956
SEBI ACT, 1992
DEPOSITORIES ACT, 1996
COMPANIES ACT, 2013

3. PREAMBLE
"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.”

4. INTRODUCTION
• SEBI IS A BODY CORPORATE HAVING PERPETUAL SUCCESSION AND A COMMON
SEAL WITH POWER TO ACQUIRE, HOLD AND DISPOSE OF PROPERTY (BOTH
MOVABLE AND IMMOVABLE) AND TO CONTRACT, SUE AND BE SUED IN ITS OWN
NAME.
ITS HEAD OFFICE IS AT MUMBAI AND IS EMPOWERED TO ESTABLISH ITS OFFICES
AT OTHER PLACES IN INDIA. SEBI PRESENTLY HAS OFFICES ALSO IN AHMEDABAD,
JAIPUR, KOLKATA, GUWAHATI, BHUBANESHWAR, NEW DELHI, CHENNAI AND
BENGALURU.

5. JURISDICTION OF SEBI
1. Listed
Company
2. Company
intends to get
listed
3. Intermediaries
4. Persons
associated with
securities market

6. OBJECTIVES OF SEBI
1. To protect the interests of investors in securities
2. To promote the development of securities market
3. To regulate the securities market and for matters
connected therewith or incidental thereto

7. COMPOSITION OF SEBI
One Chairman of the board who is appointed by the Central Government
One Board member who is appointed by the Central Bank - the RBI
Two Board members who are hailing from the Union Ministry of Finance
Five Board members who are elected by the Central Government of India

8. • THE GENERAL SUPERINTENDENCE, DIRECTION AND MANAGEMENT OF THE
AFFAIRS OF THE BOARD SHALL VEST IN A BOARD OF MEMBERS, WHICH MAY
EXERCISE ALL POWERS AND DO ALL ACTS AND THINGS WHICH MAY BE
EXERCISED OR DONE BY THE BOARD.
• THE CHAIRMAN SHALL ALSO HAVE POWERS OF GENERAL SUPERINTENDENCE
AND DIRECTION OF THE AFFAIRS OF THE BOARD AND MAY ALSO EXERCISE ALL
POWERS AND DO ALL ACTS AND THINGS WHICH MAY BE EXERCISED OR DONE BY
THAT BOARD.
• THE CHAIRMAN AND THE OTHER MEMBERS SHALL BE PERSONS OF ABILITY,
INTEGRITY AND STANDING WHO HAVE SHOWN CAPACITY IN DEALING WITH
PROBLEMS RELATING TO SECURITIES MARKET OR HAVE SPECIAL KNOWLEDGE OR
EXPERIENCE OF LAW, FINANCE, ECONOMICS, ACCOUNTANCY OR
ADMINISTRATIVE WHICH IN THE OPINION CENTRAL GOVERNMENT, SHALL BE
USEFUL TO THE BOARD.

9. HISTORY
1845
1925
1945
1956
1992

10. DECISION MAKING BY SEBI
• BY MAJORITY CONSENT
• INTERESTED PARTY RESTRICTED TO VOTE ON SUCH RESOLUTION
• CASTING VOTE - CHAIRMAN

11. FUNCTIONS OF SEBI
• TO REGULATE CAPITAL MARKET, STOCK EXCHANGE AND INTERMEDIARIES
• TO DEVELOP AND PROMOTE ISSUE OF SECURITIES & TRADING OF SECURITIES
• TO PROTECT THE INTEREST OF INVESTOR
- FROM BEING DECEIVED
- FROM BEING PUT TO LOSS
• PROHIBIT INSIDER TRADING & MARKET MANIPULATION
• TO REGISTER, REGULATE & SUPERVISE SE, DP, SB, UW, MB ETC…

12. SEBI HAS BEEN VESTED WITH THE SAME
POWERS AS THAT OF A CIVIL COURT
• THE DISCOVERY AND PRODUCTION OF BOOKS OF ACCOUNTS AND OTHER
DOCUMENTS
• SUMMONING AND ENFORCING THE ATTENDANCE OF PERSONS AND EXAMINING
THEM ON OATH;
• INSPECTION OF BOOKS, REGISTERS, AND OTHER RELATED INSTRUMENTS OF
INTERMEDIARIES;
• ISSUING COMMISSIONS FOR THE EXAMINATION OF THE WITNESSES OR DOCUMENTS.
• POWER TO ISSUE DIRECTIONS
THE SEBI HAS THE POWER TO PROHIBIT ANY COMPANY FROM ISSUING ANY OFFER
DOCUMENT IN THE INTEREST OF THE INVESTORS. IF SEBI IS SATISFIED AFTER MAKING
INQUIRIES THAT IT IS NECESSARY. IN THE INTEREST OF THE INVESTORS
I. TO PREVENT THE ACTIVITIES OF ANY INTERMEDIARY;
II. TO SECURE THE PROPER MANAGEMENT OF SUCH AN INTERMEDIARY.
IT MAY ISSUE SUCH DIRECTIONS, AS MAY BE NECESSARY TO
A) ANY PERSON OR CLASS OF PERSONS;

13. ADJUDICATION POWER
• SECTION 15-1 DEALS WITH THE SEBI'S POWER TO ADJUDICATE.
• THE SEBI MAY APPOINT ANY OF ITS OFFICERS NOT BELOW THE RANK OF DIVISION CHIEF TO BE AN
ADJUDICATING OFFICER FOR HOLDING AN INQUIRY IN THE PRESCRIBED MANNER AFTER GIVING ANY
PERSON CONCERNED A REASONABLE OPPORTUNITY OF BEING HEARD FOR THE PURPOSE OF IMPOSING
ANY PENALTY
• THE ADJUDICATING OFFICER HAS POWERS TO SUMMON AND ENFORCE THE ATTENDANCE OF ANY
PERSON ACQUAINTED WITH THE FACTS AND CIRCUMSTANCES OF THE CASE TO GIVE EVIDENCE OR TO
PRODUCE ANY DOCUMENT WHICH IN THE OPINION OF THE ADJUDICATING OFFICER, MAY BE USEFUL
FOR OR RELEVANT TO THE SUBJECT MATTER OF THE INQUIRY AND IF, ON SUCH INQUIRY, HE IS
SATISFIED THAT THE PERSON HAS FAILED TO COMPLY WITH THE PROVISIONS, HE MAY IMPOSE SUCH
PENALTY AS HE THINKS FIT IN ACCORDANCE WITH THE PROVISIONS OF ANY OF THOSE SECTIONS
• THE SEBI MAY CALL FOR AND EXAMINE THE RECORD OF ANY PROCEEDINGS UNDER THIS SECTION AND
IF IT CONSIDERS THAT THE ORDER PASSED BY THE ADJUDICATING OFFICER IS ERRONEOUS TO THE
EXTENT IT IS NOT IN THE INTERESTS OF THE SECURITIES MARKET, IT MAY, AFTER MAKING OR CAUSING
TO BE MADE SUCH INQUIRY AS IT DEEMS NECESSARY, PASS AN ORDER ENHANCING THE QUANTUM OF
PENALTY, IF THE CIRCUMSTANCES OF THE CASE SO JUSTIFY
• HOWEVER, NO SUCH ORDER SHALL BE PASSED UNLESS THE PERSON CONCERNED HAS BEEN GIVEN AN
OPPORTUNITY OF BEING HEARD IN THE MATTER. FURTHER, NOTHING CONTAINED IN THIS SECTION
SHALL BE APPLICABLE AFTER AN EXPIRY OF A PERIOD OF THREE MONTHS FROM THE DATE OF THE
ORDER PASSED BY THE ADJUDICATING OFFICER OR DISPOSAL OF THE APPEAL UNDER SECTION 15
WHICHEVER EARLIER

14. FACTORS TO BE TAKEN INTO ACCOUNT
WHILE ADJUDGING QUANTUM OF PENALTY
• SECTION 15 LAYS DOWN THAT WHILE ADJUDGING THE QUANTUM OF PENALTY, THE
SEBI OR THE ADJUDICATING OFFICER SHALL HAVE DUE REGARD TO THE FOLLOWING
FACTORS, VIZ.
• THE AMOUNT OF LOSS CAUSED TO AN INVESTOR OR GROUP OF INVESTORS AS A
RESULT OF THE DEFAULT
• THE AMOUNT OF DISPROPORTIONATE GAIN OR UNFAIR ADVANTAGE, WHEREVER
QUANTIFIABLE, MADE AS A RESULT OF THE DEFAULT
• THE REPETITIVE NATURE OF THE DEFAULT
• SECTION 15JA PROVIDES THAT ALL SUMS REALIZED BY WAY OF PENALTIES UNDER
THIS ACT SHALL BE CREDITED TO THE CONSOLIDATED FUND OF INDIA.

15. QUALIFICATION FOR APPOINTMENT AS PRESIDING
OFFICER OR MEMBER OF SECURITIES APPELLATE
TRIBUNAL
• PRESIDING OFFICER
A JUDGE OF THE SUPREME COURT OR A CHIEF JUSTICE OF A HIGH COURT OR A JUDGE OF HIGH COURT FOR AT LEAST SEVEN YEARS
• JUDICIAL MEMBER
IS OR HAS BEEN, A JUDGE OF HIGH COURT FOR AT LEAST FIVE YEARS
• TECHNICAL MEMBER
IS OR HAS BEEN, A SECRETARY OR AN ADDITIONAL SECRETARY IN THE MINISTRY OR DEPARTMENT OF THE CENTRAL GOVERNMENT OR ANY EQUIVALENT
POST IN THE CENTRAL GOVERNMENT OR STATE GOVERNMENT,
OR
IS A PERSON OF PROVEN ABILITY INTEGRITY AND STANDING HAVING SPECIAL KNOWLEDGE AND EXPERIENCE OF NOT LESS THAN 15 YEARS, IN THE
FINANCIAL SECTOR SECURITIES MARKET INSURANCE FUNDS OR COMMODITY DERIVATIVES
IN THE CASE OF A JUDICIAL MEMBER; OR THE PRESIDING OFFICER AND JUDICIAL MEMBERS OF THE SECURITIES APPELLATE TRIBUNAL SHALL BE APPOINTED
BY THE CENTRAL GOVERNMENT MUTATION WITH THE CHIEF JUSTICE OF INDIA OR HIS NOMINEES,
• THE PRESIDING OFFICER AND TECHNICAL/JUDICIAL MEMBERS OF THE SECURITIES APPELLATE TRIBUNAL SHALL BE APPOINTED BY THE CENTRAL
GOVERNMENT IN CONSULTATION WITH CJI
• THE TECHNICAL MEMBERS OF THE SECURITIES APPELLATE TRIBUNAL SHALL BE APPOINTED BY THE CENTRAL GOVERNMENT ON THE APPOINTMENT OF
TECHNICAL MEMBER RECOMMENDATION OF A SEARCH-CUM-SELECTION COMMITTEE CONSISTING OF THE FOLLOWING, NAMELY:
(A) PRESIDING OFFICER, SECURITIES APPELLATE TRIBUNAL-CHAIRPERSON
(B) SECRETARY, DEPARTMENT OF ECONOMIC AFFAIRS-MEMBER
(C) SECRETARY, DEPARTMENT OF FINANCIAL SERVICES MEMBER; AND
(D) SECRETARY, LEGISLATIVE DEPARTMENT OR SECRETARY, DEPARTMENT OF LEGAL AFFAIRS - MEMBER THE SECRETARY, DEPARTMENT OF ECONOMIC
AFFAIRS SHALL BE THE CONVENER OF THE SEARCH-CUM-SELECTION COMMITTEE. THE SEARCH-CUM-SELECTION COMMITTEE SHALL DETERMINE ITS
PROCEDURE FOR RECOMMENDING THE NAMES OF PERSONS TO BE APPOINTED.

16. • VALIDITY OF APPOINTMENT
AS PER SECTION 15MC, NO APPOINTMENT OF THE PRESIDING OFFICER, A JUDICIAL
MEMBER, OR A TECHNICAL MEMBER OF THE SECURITIES APPELLATE TRIBUNAL
SHALL BE INVALID MERELY BY REASON OF ANY VACANCY OR ANY DEFECT IN THE
CONSTITUTION OF THE SEARCH CUM-SELECTION COMMITTEE.
A MEMBER OR PART-TIME MEMBER OF THE SEBI OR THE INSURANCE REGULATORY
AND DEVELOPMENT AUTHORITY OR THE PENSION FUND REGULATORY AND
DEVELOPMENT AUTHORITY, OR ANY PERSON AT A SENIOR MANAGEMENT LEVEL
EQUIVALENT TO THE EXECUTIVE DIRECTOR IN THE SEBI OR IN SUCH AUTHORITIES,
SHALL NOT BE APPOINTED AS PRESIDING OFFICER OR MEMBER OF THE SECURITIES
APPELLATE TRIBUNAL, DURING HIS SERVICE OR TENURE AS SUCH WITH THE SEBI OR
WITH SUCH AUTHORITIES, AS THE CASE MAY BE, OR WITHIN TWO YEARS FROM THE
DATE ON WHICH HE CEASES TO HOLD OFFICE AS SUCH IN THE SEBI OR IN SUCH
AUTHORITIES.

17. • APPEAL TO SAT
ANY PERSON AGGRIEVED BY THE DECISION OF THE RSE OR ADJUDICATING
OFFICER OR ANY ORDER OF SEBI MAY APPEAL TO SAT WITHIN 45 DAYS OF
RECEIVING THE ORDER.
SAT MAY GRANT EXTENDED TIME IF SATISFIED. DISPOSAL OF APPEAL BY SAT ON
RECEIPT OF THE APPLICATION SAT SHOULD GIVE AN OPPORTUNITY OF BEING
HEARD TO THE PARTIES THEREAFTER SAT CAN PASS ANY OF THE FOLLOWING
ORDER
VARY THE ORDER SET ASIDE THE ORDER CONFIRM THE ORDER
APPEAL AGAINST THE ORDER OF SAT AN AGGRIEVED PARTY CAN FILE AN APPEAL
TO THE SUPREME COURT AGAINST THE ORDER OF SAT WITHIN 60 DAYS OF
RECEIPT OF THE ORDER OF SAT.
AN EXTENSION OF 60 DAYS CAN BE GRANTED BY THE SUPREME COURT IF
SUFFICIENT REASON IS EXPLAINED. NOTE: APPEAL TO SUPREME COURT CAN BE
FILED ONLY ON A QUESTION OF LAW

18. • PROCEDURE IN SAT
SAT IS NOT BOUND BY THE PROCEDURE LAID DOWN BY THE CPC, 1908
IT SHALL BE GUIDED BY THE PRINCIPLES OF NATURAL JUSTICE
IT WILL BE BOUND BY PROVISIONS OF THIS ACT AND OF ANY RULES
THE PROVISIONS OF THE LIMITATIONS ACT, 1963 SHALL APPLY TO AN APPEAL MADE TO
SAT
• POWERS OF SAT
THE SAT SHALL HAVE THE SAME POWERS AS ARE VESTED IN A CIVIL COURT UNDER THE
CPC, 1908, WHILE TRYING A SUIT, IN RESPECT OF THE FOLLOWING MATTERS, NAMELY:
SUMMONING AND ENFORCING THE ATTENDANCE OF ANY PERSON AND EXAMINING HIM
ON OATH; REQUIRING THE DISCOVERY AND PRODUCTION OF DOCUMENTS;
RECEIVING EVIDENCE ON AFFIDAVITS;
ISSUING COMMISSIONS FOR THE EXAMINATION OF WITNESSES OR DOCUMENTS;
REVIEWING ITS DECISIONS;
DISMISSING AN APPLICATION FOR DEFAULT OR DECIDING IT EX PARTE-,
SETTING ASIDE ANY ORDER OF DISMISSAL OF ANY APPLICATION FOR DEFAULT OR ANY
ORDER PASSED BY IT EX PARTE;
ANY OTHER MATTER WHICH MAY BE PRESCRIBED. NOTE: NO CIVIL COURT HAS
JURISDICTION TO ENTERTAIN ANY SUIT OR PROCEEDING IN RESPECT OF ANY MATTER

19. POWERS OF CENTRAL GOVERNMENT
TO ISSUE DIRECTIONS:
THE CG HAS THE POWER TO ISSUE DIRECTIONS IN WRITING TO SEBI ON QUESTION OF
POLICY AS IT MAY DEEM FIT FROM TIME TO TIME.
TO SUPERSEDE THE BOARD:
THE CG HAS THE POWER TO SUPERSEDE THE SEBI AFTER THE SATISFACTION OF
NECESSARY CONDITIONS AND BY NOTIFICATION IN THE OFFICIAL GAZETTE
MAXIMUM PERIOD FOR WHICH CG CAN SUPERSEDE SEBI IS 6 MONTHS.
THE MEMBERS SHALL VACATE THEIR OFFICE FROM THE DATE OF SUPERSESSION;
ALL THE POWERS, FUNCTIONS AND DUTIES WHICH MAY OF THE BOARD WILL BE
DISCHARGED BY SUCH PERSON OR PERSONS AS THE CG MAY DIRECT; AND
ALL PROPERTY OWNED OR CONTROLLED BY SEBI SHALL VEST IN THE CG UNTIL SEBI IS
RECONSTITUTED
THE CG CAN EXERCISE ITS POWER IN FOLLOWING CIRCUMSTANCES: -
A) ON ACCOUNT OF GRAVE EMERGENCY WHEN SEBI IS UNABLE TO DISCHARGE ITS
FUNCTIONS AND DUTIES.
B) SEBI HAS PERSISTENTLY MADE DEFAULT IN COMPLYING WITH ANY DIRECTION ISSUED
BY CG OR DID NOT DISCHARGED ITS FUNCTIONS AND DUTIES IMPOSED.
C) IN THE PUBLIC INTEREST.

20. TO GRANT IMMUNITY:
CG MAY GRANT IMMUNITY TO ANY PERSON WHO IS ALLEGED TO HAVE VIOLATED ANY OF THE
PROVISIONS OF THIS ACT.
• SUCH IMMUNITY WILL BE GRANTED IF THE PERSON HAS MADE A FULL AND TRUE DISCLOSURES IN
RESPECT OF ALLEGED VIOLATIONS AND FULFILLED OTHER CONDITIONS.
• SUCH IMMUNITY BE GRANTED ONLY IF RECOMMENDED BY SEBI.
• NO SUCH IMMUNITY SHALL BE GRANTED BY THE CG IF THE PROCEEDINGS FOR THE PROSECUTION FOR
OFFENCE HAVE BEEN INSTITUTED BEFORE THE DATE OF RECEIPT OF APPLICATION FOR GRANT OF
SUCH IMMUNITY.
• AN IMMUNITY GRANTED TO A PERSON CAN BE WITHDRAWN IF CG IS SATISFIED THAT THE PERSON
HAS NOT COMPLIED WITH THE CONDITION ON WHICH THE IMMUNITY WAS GRANTED
COMPOUNDING OF OFFENCES
FOLLOWING OFFENCES CAN BE COMPOUNDED
OFFENCES PUNISHABLE WITH FINE ONLY
OFFENCES PUNISHABLE WITH FINE OR IMPRISONMENT
OFFENCES PUNISHABLE WITH FINE OR IMPRISONMENT OR BOTH FOLLOWING OFFENCES CANNOT BE
COMPOUNDED OFFENCE PUNISHABLE WITH IMPRISONMENT ONLY, OR OFFENCES PUNISHABLE WITH
IMPRISONMENT AND ALSO WITH FINE

21. RECOVERY OF AMOUNT
IF A PERSON FAILS
TO PAY THE PENALTY IMPOSED,
FAILS TO COMPLY WITH ANY DIRECTION OF THE BOARD FOR A REFUND OF MONIES
FAILS TO COMPLY WITH A DIRECTION OF THE DISGORGEMENT ORDER
FAILS TO PAY ANY FEES DUE TO THE SEBI
THE RECOVERY OFFICER WILL DRAW UP AND SIGN A STATEMENT SPECIFYING THE
AMOUNT DUE FROM THE PERSON AND SHALL PROCEED TO RECOVER THE AMOUNT
BY ONE OR MORE OF THE FOLLOWING MODES
- ATTACHMENT & SALE OF THE PERSON'S MOVABLE PROPERTY
- ATTACHMENT OF THE PERSON'S BANK ACCOUNTS
- ATTACHMENT & SALE OF THE PERSON'S IMMOVABLE PROPERTY
- ARREST & DETENTION OF A PERSON
- APPOINT A RECEIVER FOR MANAGING THE PROCEEDS OF SALE OF THE PROPERTY