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Securities and Exchange Board of India (SEBI) was initially constituted on April 12, 1988, as a non-statutory body through a resolution of Government for dealing with all matters relating to development and regulation of securities market and investor protection and to advise the Government on all these matters. SEBI was given statutory status and powers through an ordinance promulgated on January 30, 1992.
The statutory powers and functions of SEBI were strengthened through the promulgation of the Securities Laws (Amendment) ordinance on January 25, 1995, which was subsequently replaced by an Act of Parliament. In terms of this Act, Securities, and Exchange Board of India (SEBI) has been vested with regulatory powers over corporate in the issuance of capital, the transfer of securities, and other related matters. Besides, SEBI has also been empowered to impose monetary penalties on capital market intermediaries and other participants for a range of violation.
SEBI is managed by six members
- One chairman (nominated by Central Government),
- Two members (Officials of central ministries),
- one member from RBI, and
- remaining two members are also nominated by Central Government.
The office of Securities and Exchange Board of India (SEBI) is situated in Mumbai with its regional offices in Kolkata, Delhi, and Chennai. In 1988, the initial capital of SEBI was 7.5 crore which was provided by its promoters (IDBI, ICICI, and IFCI). This amount was invested in its interest amount day-to-day expenses of Securities and Exchange Board of India (SEBI) are met.
All statutory powers for regulating Indian capital market are vested with Securities and Exchange Board of India (SEBI) itself.
Functions of SEBI
- To safeguard the interests of investors and to regulate capital market with suitable measures.
- To regulate the business of stock exchanges and other securities market.
- To regulate the working Stock Brokers, Sub-brokers, Share Transfer Agents, Trustees, Merchant Bankers, Underwriters, Portfolio Managers etc and also to make their registration.
- To register and regulate collective investment plans of mutual funds.
- To encourage self-regulatory organization.
- To eliminate malpractices of security markets.
- To train the persons associated with security markets and also to encourage investors’ education.
- To check inside trading of securities.
- To supervise the working of various organizations trading in the security market and also to ensure systematic dealing.
- To promote research and investigations for ensuring the attainment of above objectives.