SEBI was established in 1992 to regulate the securities markets and protect investors. It aims to promote orderly development of the markets and ensure investor protection. SEBI has various powers to regulate stock exchanges, intermediaries, and impose penalties. Its functions include protective, developmental, and regulatory roles like prohibiting unfair practices, promoting training, and regulating intermediaries. Over time, SEBI has helped transform trading infrastructure and made the markets safer for investors.

1. Securities and Exchange Board of India
Securities and Exchange Board of India
A CRITICAL ANALYSIS

2. Flow of Presentation
• A Brief History
• Introduction
• SEBI - Preamble
• Objectives
• Functions
• Contributions
• Summary
MET-IOM SEBI- A Critical Analysis 2

3. A Brief History
Prior to SEBI the security markets and stock exchange were regulated by
several Acts, which were:
• The Bombay Securities Contracts Control Act, 1925
• The Capital Issues (Control) Act, 1947
• The Securities Contracts (Regulation) Act, 1956
• Registrar of Companies (The Indian Companies Act, 1956)
For a healthy growth of capital markets and to prevent malpractices in
trading, the Government subsequently decided to “set up a separate board
for the regulation and orderly functioning of Stock Exchange and the
securities industry”
MET-IOM SEBI- A Critical Analysis 3

4. A Brief History (Contd…)
• In July 1987, the Cabinet Committee on Economic Affairs approved the
broad features of SEBI and process of establishment of SEBI was commenced
• The statement of Purpose and Approach outlined twin objectives of SEBI as,
- promoting healthy and orderly development of securities markets and
- ensuring adequate investor protection and emphasized the developmental philosophy
with which SEBI would operate
MET-IOM SEBI- A Critical Analysis 4

5. Introduction
• SEBI was established as a statutory authority through an Ordinance
promulgated on 30.01.1992 by the President of India
• SEBI is the regulator for the Securities Market in India
• It is managed by a Board comprising of nine members including the
chairman
• Paradoxically this is a positive outcome of the Harshad Mehta Securities
Scam of 1990-91
MET-IOM SEBI- A Critical Analysis 5

6. SEBI - PREAMBLE
The Preamble of the Securities and Exchange Board of India describes
the basic functions of the Securities and Exchange Board of India as
"...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"
MET-IOM SEBI- A Critical Analysis 6

7. Purpose and Role of SEBI
• SEBI was set up with the main purpose of keeping a check on malpractices
and protect the interest of investors. It was set up to meet the needs of three
groups
• Issuers:
• For issuers it provides a market place in which they can raise finance fairly and easily
• Investors:
• For investors it provides protection and supply of accurate and correct information
• Intermediaries:
• For intermediaries it provides a competitive professional market
MET-IOM SEBI- A Critical Analysis 7

8. Basic Objectives
• To protect the interests of investors in securities
• To promote the development of Securities Market
• To regulate the securities market and
• For matters connected therewith or incidental thereto
MET-IOM SEBI- A Critical Analysis 8

9. Powers of SEBI
• Powers relating to stock exchanges and intermediaries:
• SEBI has wide powers regarding the stock exchanges and intermediaries dealing
in securities
• It can ask information from the stock exchanges and intermediaries regarding
their business transactions for inspection/scrutiny and other purposes
MET-IOM SEBI- A Critical Analysis 9

10. Powers of SEBI (Contd…)
• Powers relating to monetary penalties:
• SEBI’ has been empowered to impose monetary penalties on capital market
intermediaries and other participants for a range of violations
• It can even impose suspension of their registration for a short period
MET-IOM SEBI- A Critical Analysis 10

11. Powers of SEBI (Contd…)
• Powers to initiate actions relating to functions assigned:
• SEBI has a power to initiate actions in regard to functions assigned
• For example, it can issue guidelines to different intermediaries or can introduce
specific rules for the protection of interests of investors
MET-IOM SEBI- A Critical Analysis 11

12. Powers of SEBI (Contd…)
• Powers under Securities Contracts (Regulation) Act :
• For effective regulation of stock exchanges, the Ministry of Finance issued a
Notification on 13 September, 1994 delegating several of its powers under the
Securities Contracts (Regulation) Act to SEBI
• SEBI is also empowered by the Finance Ministry to nominate three members on
the Governing Body of every stock exchange instead of earlier practice of
government making such nominations
MET-IOM SEBI- A Critical Analysis 12

13. Powers of SEBI (Contd…)
• Powers to regulate business of stock exchanges :
• SEBI is empowered to regulate the business of stock exchanges
• Intermediaries associated with the securities market as well as mutual funds,
fraudulent and unfair trade practices relating to securities and regulation of
acquisition of shares and takeovers of companies
MET-IOM SEBI- A Critical Analysis 13

14. Powers of SEBI (Contd…)
• Powers relating to insider trading:
• SEBI has power to regulate insider trading or can regulate the functions of
merchant bankers
MET-IOM SEBI- A Critical Analysis 14

15. Functions of SEBI
• The SEBI performs functions to meet its objectives.
• Functions can be broadly divided into:
• Protective functions
• Developmental functions
• Regulatory functions
MET-IOM SEBI- A Critical Analysis 15

16. Functions of SEBI (Contd…)
• Protective Functions-
• It Checks Price Rigging
• It Prohibits Insider trading
• SEBI prohibits fraudulent and Unfair Trade Practices
• SEBI undertakes steps to educate investors
• SEBI promotes fair practices and code of conduct in security market
MET-IOM SEBI- A Critical Analysis 16

17. Functions of SEBI (Contd…)
• Developmental Functions-
• SEBI promotes training of intermediaries of the securities market.
• SEBI tries to promote activities of stock exchange by adopting flexible and
adoptable approach in following way:
• SEBI has permitted internet trading through registered stock brokers.
• SEBI has made underwriting optional to reduce the cost of issue.
• Even initial public offer of primary market is permitted through stock exchange.
MET-IOM SEBI- A Critical Analysis 17

18. Functions of SEBI (Contd…)
• Regulatory Functions-
• It has framed rules and regulations and a code of conduct to regulate the
intermediaries such as merchant bankers, brokers, underwriters, etc.
• It registers and regulates the working of all those who are associated with stock
exchange in any manner.
• It registers and regulates the working of mutual funds etc.
• It regulates takeover of the companies.
• It conducts inquiries and audit of stock exchanges.
MET-IOM SEBI- A Critical Analysis 18

19. Change in the Market
• The complete transformation of the trading, clearing and settlement
infrastructure
• Dramatic transformation to a paperless market and transparent trading
system
• Cutting the settlement cycle and now going forward towards a T+1
settlement system
• SEBI has made the markets much safer for investors
MET-IOM SEBI- A Critical Analysis 19

20. Contributions
• Issue of guidelines
• Public interest advertisements
• Dealing with complaints of investors
• Investor education
• Investor surveys
• Introduction to stockinvest
• Disclosures by companies
MET-IOM SEBI- A Critical Analysis 20

21. Board Members of SEBI
MET-IOM
Shri U. K. Sinha,
Chairman, SEBI,
SEBI Bhavan, Bandra Kurla Complex,
Bandra (E), Mumbai - 400051
Shri Rajeev Kumar Agarwal
Whole-Time Member, SEBI,
SEBI Bhavan, Bandra Kurla Complex,
Bandra (E), Mumbai - 400051
Shri Prashant Saran
Whole-Time Member, SEBI,
SEBI Bhavan, Bandra Kurla Complex,
Bandra (E), Mumbai - 400051.
Shri Arvind Mayaram
Secretary,
Department of Economic Affairs,
Ministry of Finance, New Delhi
Member Nominated
Shri V. K. Jairath
194 B Kalpatru Horizon,
S.K. Ahire Marg, Worli,
Mumbai 400018
Member Appointed
Shri S. Raman
Whole-Time Member, SEBI,
SEBI Bhavan, Bandra Kurla Complex,
Bandra (E), Mumbai - 400051.
SEBI- A Critical Analysis 21

22. BOARD MEMBERS (contd..)
MET-IOM
Shri Anand Sinha
Deputy Governor
Reserve Bank of India
Member Nominated
Shri Naved Masood
Secretary,
Ministry of Corporate Affairs
Member Nominated
Shri Prakash Chandra Chhotaray
IRS (Retired Chairman of Income
Tax Settlement Commission,
New Delhi)
Part-time Member
SEBI- A Critical Analysis 22

23. Summary
• For the development of any economy
• Capital Market, which is one of the main organ to mobilize funds of
huge order
• shall evolve all steps to develop the market
• simultaneously bringing in the credibility in the financial market,
which is watched world wide
• through effective and speedy implementable regulations, ultimately,
protecting the interest of the Investors and the Country
MET-IOM SEBI- A Critical Analysis 23

24. Know your Stock Markets
• Major Stock Exchanges in India:
• National Stock Exchange (NSE)
• Bombay Stock Exchange (BSE)
• MCX’SX Stock Exchange (MCX’sx)
• Various products for investments:
• Equities
• Derivatives
• Commodities
• Currencies / Forex
MET-IOM SEBI- A Critical Analysis 24

25. Terminologies used in Stock Markets
• Primary Market and Secondary Market
• Broker or Brokerage Firm
• Know Your Customers (KYC)
• Demat
• Trading
• Delivery
• Intraday
• Blue Chip Stocks
• Bull and Bear Market
MET-IOM SEBI- A Critical Analysis 25

26. Terminologies used in Stock Markets
• Investor and Speculator
• Quote
• Settlement
• Portfolio
• Liquidity
• Volatility
• Hedging
• Arbitrage
• Insider Trading
MET-IOM SEBI- A Critical Analysis 26

27. Know more about Stock Markets
• https://www.nseindia.com
• https://www.bseindia.com
• http://www.moneycontrol.com
• http://www.managementparadise.com/forums/stock-markets-tips-gyan/22083-
definations-every-word-used-stock-market-known-must-read.html
• http://www.tmxmoney.com/en/research/glossary.html
• http://www.timothysykes.com/2013/06/trading-terms-you-need-to-know/
MET-IOM SEBI- A Critical Analysis 27

28. Presented By-
Sr. No. Name Roll
No.
1 ANSHARI NAWED ABDUL VAHID 61
2 ATTRA GURUDEV RAVINDERSINGH 62
3 COUTINHO JOHN PETER 63
4 JAIN ASHISH GANPATHLAL 74
5 KHAN DANISH WAHID 80
6 PAYYAPPATE RASHMI RAVINDRAN 103
MET-IOM SEBI- A Critical Analysis 28

29. Thank You