Objectives of SEBI

SEBI (Securities And Exchange Board of India) is the regulator for the securities market in India. The key objective of SEBI is to encourage healthy and organised growth of the securities market in India and to provide investor protection. It was formally set up by The Government of India in 1988 and given statutory powers in 1992.

What are the Main Objectives of SEBI?

Investor Protection

Without active investors, the capital market is worthless. For that reason, it is essential to safeguard the interests of the investors. The protection of the interests of investors implies shielding them from erroneous information provided by the businesses, lowering the likelihood of default, etc. Thus, the top objective of the SEBI (Securities And Exchange Board of India) is to offer security to the investors.

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Regulation of Stock Markets

SEBI regulates the stock markets to ensure that effective services are offered to all the parties involved like brokers, merchant bankers, and other intermediaries to promote professionalism. Moreover, it also has to ensure fair practices.

Checking for Insider Trading

Insider trading means the trading of a company’s securities by individuals (like directors, promoters, etc) with access to non-public information about the company. These people have access to secret information about the company. This harms the interests of the common investors. In a number of countries insider trading is illegal. The reason being that it is unfair to other investors who do not have access to the information. Quite a few steps have already been taken to check insider trading by SEBI.

Control over Financial Intermediaries

It is essential to keep close track of the activities of the brokers and other intermediaries in order to regulate the capital markets.

Since its creation, SEBI (Securities And Exchange Board of India) has been working towards the achievement of its objectives with commendable zeal. The advancements in the securities markets like capitalization requirements, margining, establishment of clearing organizations etc. has decreased the risk of default.

In a nutshell, we can say that the objectives of SEBI are to protect the investors, regulate stock exchanges & financial intermediaries and encourage healthy growth and development of capital market in India.

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SEBI is identical to the U.S. SEC and is an important element in strengthening the quality of the stock markets in India. SEBI has relished good results as a regulator by driving organized reforms. It is acknowledged for fast movement towards making the stock markets electronic and paperless. It has additionally been a key player in taking fast and useful steps in light of the international turmoil and the Satyam disaster.

In October 2011, it improved the level and amount of disclosures to be made by Indian businesses. Considering the worldwide crisis, it liberalised the takeover code to aid investments. It has raised the application limit for retail individuals to Rs 2 lakh, from Rs 1 lakh at the moment.