The Indian financial market is one of the most trusted in the world in the context of transparency and safety for security issuers, investors and intermediaries. All credit goes to strict supervision of well structured and bye-law operating regulatory authority. This authority is called Securities and Exchange Board of India (SEBI). Let’s have a look at SEBI, the guardian of Indian financial market.
- What is SEBI?
- Organizational Structure
- Objectives
- Main role of SEBI
- SEBI Functions
- Complaint redressal system
- SEBI Address
What is SEBI?
In 1980’s there were huge malpractices and frauds emerging in the stock market of India. This was due to huge sudden cash flow in the market. Everyone wanted to get rich very quickly by finding loopholes in the system. Most prominent of these frauds was price rigging. Insult to the injury was that there was no authority to listen to grievances of traders and investors. This situation created a grey-area and forced many traders and investors shirk from the stock market. Union Government of India noticed this decrease of figures and decided to form an organization which can help recover the decrease in the financial market of India.
Securities and Exchange Board of India (SEBI) was established in 1988. Primary role at that time was to observe the market but SEBI had no power to control anything. It was a non-statutory body. To give it powers, Union Government of India passed SEBI Act 1992. On 12 April 1992 SEBI became an autonomous body with statutory powers.
Organizational Structure of SEBI
There are main 9 (nine) members on the SEBI Board.
- One chairman appointed by Government of India
- Two members are officers from Union Finance Ministry
- One member from Reserve Bank of India (RBI)
- Five members are appointed by Union Government of India. Out of these five, three are whole-time members
As of writing this article, current chairman of SEBI is Ajay Tyagi.
List of Chairmen-
| Sl no | From | To | Name |
|---|---|---|---|
| 1 | 10 February 2017 | present | Ajay Tyagi |
| 2 | 18 February 2011 | 10 February 2017 | U K Sinha |
| 3 | 18 February 2008 | 18 February 2011 | C. B. Bhave |
| 4 | 18 February 2005 | 18 February 2008 | M. Damodaran |
| 5 | 20 February 2002 | 18 February 2005 | G. N. Bajpai |
| 6 | 21 February 1995 | 20 February 2002 | D. R. Mehta |
| 7 | 17 January 1994 | 31 January 1995 | S. S. Nadkarni |
| 8 | 24 August 1990 | 17 January 1994 | G. V. Ramakrishna |
| 9 | 12 April 1988 | 23 August 1990 | Dr. S. A. Dave |
There are total 20 Departments in SEBI. Read SEBI departments for your reference.
Objectives of SEBI
- To provide a transparent and healthy platform for corporates to raise funds from the financial market
- To create and enforce bye-laws for corporates and financial intermediaries
- To protect the rights of investors and ensure the safety of their investment
- Listen and provide a support system for investor grievances
- Promote and develop the financial market of India
What is the main role of SEBI in financial market of India?
SEBI was established to regulate the financial market of India. To achieve this objective, it takes care of three most important entities of financial market viz.
- Issuers of securities
- Investor
- Financial Intermediaries
These are corporate entities which raise funds from the financial market. SEBI ensures that they get a transparent and healthy environment for their needs.
These are the ones who keep the financial market alive. They earn from these markets thus it is the responsibility of SEBI to ensure that investors don’t fall prey to any manipulation or fraud in the market.
These intermediaries act as a mediator in the financial market. Their presence brings smoothness and safety in financial transactions.
SEBI Functions
SEBI’s Preamble describes in detail the functions and powers of the board. Its Preamble states that SEBI must “protect the interests of investors in securities and to promote the development of, and to regulate the securities market and for matters connected there with or incidental there to.”
Its functions can be divided in three parts viz.
- Protective functions
- Prevent price rigging
- Prohibit insider trading
- Financial education for Investors
- SEBI guidelines
- Developmental functions
- Introduction of electronic platform for financial market
- DEMAT form of securities
- Introduction of Discount brokerage
- Training for financial intermediaries
- Buy-sell mutual funds directly from AMC through a broker
- Underwriting is optional to reduce the cost of issue
- IPO is permitted through exchange
- Regulatory functions
- SEBI has designed guidelines and code of conduct that are enforced to financial intermediaries and corporates.
- SEBI registers all the intermediaries, share transfer agents, trustees and all those who are associated with the stock exchange in any manner.
- SEBI registers and regulates the functioning of mutual funds.
- SEBI regulates takeover of companies.
- Conduct inquiries and audit of exchanges.
SEBI performs the following functions to provide a safe and transparent environment for investors, who keep the financial market alive. These protective functions are –
One of the most important objectives behind the establishment of SEBI was to stop manipulated huge fluctuations in the financial market. Fluctuations are actually the basis to trade and earn money in the financial market for traders/investors. In-fact by studying historical fluctuations, several theories have emerged to predict the trend. These theories are collectively called as Technical Analysis (TA) and today very popular among traders. Usually, these fluctuations are natural but sometimes sudden fluctuations are fixed already by a group of the corporates leading to a huge loss for investors/traders. These fixed fluctuations are called price rigging/price fixing/collusion. SEBI keeps strict surveillance to prevent such price riggings. Introduction of circuits is one of them. A circuit is defined as a threshold with respect to previous day closing. If a security price goes beyond this defined circuit (threshold), a circuit breaker comes into action and trading on that security is halted for some time or the whole day.
This can be seen as a part to prevent price rigging. A company’s stock price fluctuation is highly affected by any public news/announcement about that company. Obviously, any forthcoming public news/announcement is already accessible by some persons in the company. What if they take advantage of this coming news/announcement by buy-sell company’s security beforehand. This is called insider trading. To prevent insider trading, SEBI has barred trusts of listed companies and employee welfare schemes from purchasing their own shares from the secondary markets. SEBI also asks listed companies to disclose all their existing employee benefit schemes involving the stock purchase and align them in accordance with its ESOS and ESPS guidelines within a given timeframe.
SEBI conducts various online and offline seminars through various mediums to educate the traders and investors. This education starts from basics of financial market and covers money management as well.
There are several other unfair practices which can be used by the corporates and others to manipulate security markets. SEBI makes sure that these are prevented beforehand by enforcing its bye-law guidelines.
Developmental functions refer to the SEBI initiatives which bring fresh breathe and innovations in Indian financial market. Developmental functions include but not limited to
Regulatory functions refer to enforcement of SEBI bye-laws to financial intermediaries and corporates. This ensures that stock market will run smoothly with transparency. This function includes –
SEBI Investor complaint redressal system
A complaint redressal system has been established for investors. It is called Sebi COmplaints REdressal System (SCORES).
You can visit SCORES website to register any grievance.
SEBI Toll Free Helpline 1800 22 7575
Address of SEBI
Headquarter
SEBI Bhavan BKC
Address :
Plot No.C4-A, ‘G’ Block
Bandra-Kurla Complex, Bandra (East),
Mumbai – 400051, Maharashtra
Tel : +91-22-26449000 / 40459000
Fax : +91-22-26449019-22 / 40459019-22
E-mail : [email protected]
Tel : +91-22-26449950 / 40459950
Regional Offices
| East Zone | West Zone |
|---|---|
| “Eastern Regional Office (ERO) Address : The Regional Director, L&T Chambers, 3rd Floor, 16 Camac Street, Kolkata – 700017, West Bengal Tel. Board: +91-33-23023000. Fax : +91-33-22874307 E-mail : [email protected]” |
“Western Regional Office (WRO) Address : The Regional Director, Unit No: 002, Ground Floor, SAKAR I, Near Gandhigram Railway Station Opp. Nehru Bridge Ashram Road, Ahmedabad – 380009, Gujarat Tel. Board: +91-79-26583633-35 E-mail : [email protected]” |
| “Bhubaneswar Local Office Address : IDCOL House, Ashok Nagar, Unit – II, Bhubaneswar – 751009, Odisha Tel. Board: +91-0674-2535318-19 E-mail : [email protected]” |
“Indore Local Office Address : 104-105, Satguru Parinay, Opposite C-21 Mall, A.B. Road, Indore – 452010, Madhya Pradesh Tel. Board: +91-0731-2557002 E-mail : [email protected]” |
| “Guwahati Local Office Address : NEDFI House, 4th Floor G.S. Road, Dispur, Guwahati – 781006, Assam Tel. Board: +91-0361-2232825 E-mail : [email protected]” |
“Jaipur Local Office Address : Ground Floor, Jeevan Nidhi 2, LIC Building, Ambedkar Circle, Jaipur – 302005, Rajasthan Tel. Board: +91-0141-2744212/213 E-mail : [email protected]” |
| “Patna Local Office Address : Udyog Bhawan, 3rd Floor, East Gandhi Maidan, Patna – 800004, Bihar Tel. Board: +91-0612-2675922 E-mail : [email protected]” |
“Panaji Local Office Address : 6th Floor, EDC House, Atmaram Borkar Road, Panaji – 403007, Goa Tel. Board: +91-832-2423110 E-mail : [email protected]” |
| “Ranchi Local Office Address : New Collectorate Building, A-Block, Room No. 601 to 604, 6th Floor, Kutchery Road, Ranchi – 834001, Jharkhand Tel. Board: +91-651-2223371 E-mail : [email protected]” |
“Raipur Local Office Address : 1st Floor, Investment Building, Phase-I, LIC Campus, Pandri, Raipur – 492004, Chhattisgarh Tel. Board: +91-771-2583991 E-mail : [email protected]” |
| North Zone | South Zone |
|---|---|
| “Northern Regional Office (NRO) Address : The Regional Director, 5th Floor, Bank of Baroda Building, 16, Sansad Marg, New Delhi – 110001, Delhi Tel. Board: +91-11-23724001-05 Fax : +91-11-23724006 E-mail : [email protected]” |
“Southern Regional Office (SRO) Address : 7th Floor, 756-L, Anna Salai, Chennai – 600002, Tamil Nadu Tel. Board: +91-44- 28880222 / 28526686 Fax : +91-44 -28880333 E-mail : [email protected]” |
| “Chandigarh Local Office Address : SCO 127-128, First Floor, Sector 17C, Chandigarh – 160017, Chandigarh Tel. Board: +91-172-2541717 E-mail : [email protected]” |
“Bengaluru Local Office Address : 2nd Floor, Jeevan Mangal Building, No.4, Residency Road, Bengaluru – 560025, Karnataka Tel. Board: +91-080-22222262/ 22222264/ 2222 2283 E-mail : [email protected]” |
| “Dehradun Local Office Address : 2nd Floor, GMVN Building, 74/1, Rajpur Road, Dehradun – 248001, Uttarakhand Tel. Board: +91 0135-2740722/0135-2740725 Fax : +91 0135-274072/2740722 E-mail : [email protected]” |
“Hyderabad Local Office Address : 1st Floor, Indira Chambers, 8-2 622/5/A/1, Road No. 10, Avenue 4, Banjara Hills, Hyderabad – 500034, Andhra Pradesh Tel. Board: +91-040-23384475/ 23384476 E-mail : [email protected]” |
| “Jammu Local Office Address : Hall No. 405-408, 4th floor, B-2, South Block, Bahu Plaza, Rail Head Complex Jammu, Jammu – 180014, Jammu and Kashmir Tel. Board: 0191-2479971 / 0191-2479981 E-mail : [email protected]” |
“Kochi Local Office Address : 6th Floor, Finance Tower, Kaloor, Kochi – 682017, Kerala Tel. Board: +91-0484-2404100/ 2404200 Fax : +91-0484-2404100 E-mail : [email protected]” |
| “Lucknow Local Office Address : 3rd Floor, Eldeco Corporate Chambers-II, Vibhuti Khand, Gomti Nagar, Lucknow – 226010, Uttar Pradesh Tel. Board: +91-0522-4017192 & 0522 – 4017193 E-mail : [email protected]” |
Shimla Local Office
Address :
Shanti Vihar,
Kasumpti,
Shimla – 171009, Himachal Pradesh
Tel. Board: +91 177 2622600
E-mail : [email protected]
⇯