The document provides details about the Securities and Exchange Board of India (SEBI). It discusses that prior to SEBI, securities markets were regulated by various acts. SEBI was established in 1992 as a statutory regulator for securities markets in India with its headquarters in Mumbai. The key functions of SEBI include protecting investors, regulating securities markets, and promoting the development of markets. It has powers to investigate and take action against entities not complying with its regulations. Appeals against SEBI orders can be made to the Securities Appellate Tribunal.

1. Made by-
Dr Ramandeep
Assistant Professor
Deptt. Of Commerce
GCW, Sirsa (Haryana)

2. 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 decided to set up Securities Exchange Board of India for the
regulation and orderly functioning of Stock Exchange and the securities
industry”

3. • SEBI was established as a statutory authority through
promulgated on 30.01.1992 by the President of India.
• SEBI is the regulator for the Securities Market in India
• Headquarters- Bandra Kurla Complex, Mumbai
• Regional offices- New Delhi, Kolkata, Chennai &Ahmedabad

4. • To protect the interest of investors in securities;
• to promote the development of securities market in
India, and
• to regulate the security market.

5. i. AChairman (Currently U.K.Sinha)
ii. 2 members from amongst the officials of the central
government dealing with Finance and Administration of
the Companies Act, 1956
iii. 1 member from amongst ReserveBank of India
iv. 5 members of whom at least 3 shall be whole time
members, to be appointed by the central government.

6. The SEBI performs functions to meet its objectives.
The Functions can be broadly divided into:
• Protective functions
• Developmental functions
• Regulatory functions

7. Functions of SEBI

8. •It checks price rigging.
•It prohibits insider trading.
• It prohibits fraudulent and unfair trade practices.
• It undertakes steps to educate investors.
• It promotes fair practices and code of conduct in the market.

9. •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.

10. • 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
• It regulates takeover of the companies.
• It conducts inquiries and audit of stock exchanges.

11. Powers of SEBI

12. • Discovery & production of books of account &other documents.
• Summoning &enforcing the attendance of persons &examining
them on oath.
• Inspection of any books and records of a listed Co.
• Issuing commissions for the examination of witnesses or
documents

13. • During an investigation,
▫ Suspend the trading of any security in a recognised stock
exchange
▫ Restrain persons from accessing the securities market &
prohibit any person associated with securities market to buy,
sell or deal in securities
▫ Suspend any office-bearer of any stock exchange or self-
regulatory organisation from holding such position

14. • W.r.t. regulate or prohibit issue of prospectus
• Requirement for listing and transfer of securities
• Other powers
▫ Penalties
▫ Fees
▫ Issue orders
▫ Hear appeals against refuse to listsecurities
▫ Suspend registration of any intermediaries

15. • The Board are vested with same power as that of civil
court.
• Power to approve the bye-laws of stock exchanges.
• Power of SEBI to make or amend bye-laws of
recognized stock exchanges.
• Licensing of dealers in securities in certain areas
• Public Issue and listing of securities referred in SCRA

16. Investigation by the Board

17. 1. Grounds for issue of an order of investigation:
(a) Where the transactions in securities are being dealt with in a
manner detrimental to the investors or the securities market; or
(b) any intermediary or any person associated with the securities
market has violated any of the provisions of this Act.

18. (2) Furnishing of relevant documents to the
investigating authority
It shall be the duty of-
 every manager, managing director, officer and other employee
of the company,
 every person associated with the securities market to preserve,
and
 to produce to the Investigating Authority or any person
authorized by it in this behalf,

19. The Investigating Authority may keep in its custody any
books, registers, other documents and record produced
for six months and thereafter shall return the same

20. Any person, directed to make an investigation, may
examine on oath, any manager, managing director,
officer and other employee of any intermediary or any
person.

21. Notes of any examination shall be taken down in
writing and shall be read over to, or by, and signed by,
the person examined, and may thereafter be used in
evidence against him.

22. (a) to produce to the Investigating
Authority or any person authorized
by it in this behalf any book,
register, other document and
record which is his duty to
produce; or
(b) to furnish any information
which is his duty to furnish; or
(c) to appear before the Investigating
Authority personally or to answer
any question which is put to him
by the Investigating Authority in
pursuance of that sub-section; or
(d) to sign the notes of any
examination,
Person shall be punishable with-
imprisonment for a term which
may extend to one year, or with
fine, which may extend to one
crore rupees, or with both, and
also with a further fine which
may extend to five lakh rupees
for every day after the first
during which the failure or
refusal continues.

23. If the Investigating Authority has reasonable ground to
believe that the books, registers, other documents may
be destroyed, mutilated, altered, falsified or secreted,
the Investigating Authority may make an application
to the Magistrate or Judge for an order for the
seizure of such books, registers, other documents and
record.

24. The authorized officer may take the services of any police
officer or any officer of the Central Government, or of
both, to assist him for all or any of the purposes with
respect to impounding of documents and it shall be the
duty of every such officer to comply with such requisition.

25. The Magistrate or Judge may, by order, authorize the
Investigating Authority –
• to enter the place or places,
• to search that place or those places and
• to seize books, registers, other documents and
record,

26. The Investigating Authority shall keep in its custody the
books, registers, other documents and record seized
under this section for such period not later than the
conclusion of the investigation.

28. Contravention
 Failure to furnish any
document, return or report to
the Board
 File any return or furnish any
information, books or other
documents within the time
specified therefore in the
regulations
 To maintain books of
account or records
Penalty
Penalty of Rs.1 Lakh Per
Day during which such
failure continues or Rs. 1
Crore, whichever is less

29. Contravention
 Failure to enter into
an agreement with
his client
Penalty
Penalty of Rs.1 Lakh Per
Day during which such
failure continues or Rs. 1
Crore, whichever is less

30. Contravention
Failure to redress the
grievances of investors,
after having been called
upon by the Board in
writing to redress the
grievances of investors.
Penalty
Penalty of Rs.1 Lakh Per
Day during which such
failure continues or Rs. 1
Crore, whichever is less

31. Contravention
Doing such activity without
obtaining certificate of
registration, OR fails to
comply the conditions
specified in the governing
regulations .
Penalty
Penalty of Rs.1 Lakh Per
Day during which such
failure continues or Rs. 1
Crore, whichever is less

32. Contravention
Fails to comply with any of
the regulations providing
for restrictions on the
activities of the asset
management companies
Penalty
Penalty of Rs.1 Lakh Per
Day during which such
failure continues or Rs. 1
Crore, whichever is less

33. Contravention
 Fails to issue contract notes
 Fails to deliver any security.
 Charges excess brokerage
Penalty
Penalty not exceeding 5 times the
amount of contract note.
Penalty of Rs. 1 lakh per day during
which such failure continues or Rs. 1
crore , whichever is less.
Penalty of Rs. 1 Lakh or 5 times the
amount of brokerage excess charged,
whichever is higher.

34. Contravention
Contravention of
provisions of
Insider Trading
Regulations
Penalty
 Penalty of Rs. 25 crore
or 3 times the amount
of profits made out of
such Insider Trading,
whichever is higher.

35. Contravention
Contravention of
provisions of Takeover
Code Regulations
Penalty
 Penalty of Rs. 25 crore or
3 times the amount of
profits made out of such
failure, whichever is higher.

36. Contravention
Indulgence in any
fraudulent and unfair
trade practices
Penalty
 Penalty of Rs. 25 crore
or 3 times the amount
of profits made out of
such practice, whichever
is higher.

37. Securities Appellate Tribunal
(SAT)

38. The Central Government shall, by notification,
establish a Tribunal to be known as the Securities
Appellate Tribunal.

39. The SAT shall consist of a Presiding Officer and such
number of Judicial Members and Technical
Members as the Central Government may determine.
The Presiding Officer may transfer a Judicial Member
or a Technical Member of the Securities Appellate
Tribunal from one Bench to another Bench.

40. A person shall not be qualified for appointment as the Presiding Officer or a
Judicial Member or a Technical Member unless he—
(a) is, or has been, a Judge of the Supreme Court or a Chief Justice of a High
Court or a Judge of High Court for at least 7 years, in the case of the
Presiding Officer; and
(b) is, or has been, a Judge of High Court for at least 5 years, in the case of a
Judicial Member; or
(c) in the case of a Technical Member––
(i) is, or has been, a Secretary or an Additional Secretary in the Ministry or
Department of the Central Government or State Government.

41. The Presiding Officer and Judicial Members of the
Securities Appellate Tribunal shall be appointed by the
Central Government in consultation with the Chief
Justice of India or his nominee.

42. The Technical Members of the SAT shall be appointed by the
CG on the recommendation of a Search-cum-Selection
Committee consisting of the following, namely:-
(a) Presiding Officer of SAT - 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.

43. The Presiding Officer or every Judicial or Technical Member
shall hold office for a term of 5 years from the date on
which he enters upon his office, and shall be eligible for
reappointment for another term of maximum 5 years.
 Provided that no Presiding Officer or the Judicial or
Technical Member shall hold office after he has attained the
age of 70 years.

44. Appeal to the Securities Appellate
Tribunal

45. (1) any person aggrieved,—
(a) by an order of the Board made under this Act, or the rules or
regulations made there under; or
(b) by an order made by an adjudicating officer under this Act;
or
(c) by an order of the Insurance Regulatory and Development
Authority or the Pension Fund Regulatory and Development
Authority, may prefer an appeal to a SAT.

46. Every appeal shall be filed within a period of 45 days
from the date on which a copy of the order made by the
Board or the Adjudicating Officer or the IRDA or the
PFRDA, as the case may be, is received by him and it
shall be in such form and be accompanied by such fee
as may be prescribed :

47. On receipt of an appeal, the Securities Appellate Tribunal
(SAT) may, after giving the parties to the appeal, an
opportunity of being heard, pass such orders thereon
as it thinks fit, confirming, modifying or setting aside
the order appealed against.

48. The Securities Appellate Tribunal shall send a copy of
every order made by it to the Board, or the IRDA or
the PFRDA, as the case may be the parties to the appeal
and to the concerned Adjudicating Officer.

49. The appeal filed before the Securities Appellate Tribunal
under sub-section (1) shall be dealt with by it as
expeditiously as possible and endeavor shall be made
by it to dispose of the appeal finally within 6 months
from the date of receipt of the appeal.