Securities and Exchange Board of India (SEBI)

The Securities and Exchange Board of India was established in 1988 and given statutory powers on 12 April 1992 as per the provisions of the SEBI Act, 1992. The management of SEBI vests in the Board having the following members:

A Chairman appointed by the Central Government.
Two Members from the Ministries of the Central Government managing Finance and Law.
One Member from the Reserve Bank of India.
Two other Members appointed by the Central Government.

Divisions/Departments of Securities and Exchange Board of India

Market Intermediaries Regulation and Supervision Department: This Department has the responsibility of the registration, supervision, compliance monitoring and inspections of all market intermediaries.
Market Regulation Department: This Department has the responsibility for monitoring the functioning of securities exchange & subsidiaries, and market institutions like Clearing and settlement organizations and Depositories.
Derivatives and New Products Department: This Division has the responsibility of monitoring the functioning of derivatives exchanges and associated market organizations.
Corporation Finance Department: This division handles concerns associated with (i) Issuance and listing of securities (ii) corporate governance and accounting standards (iii) corporate restructuring (iv) Delisting etc.
Investment Management Department: This division handles the registration and regulation of mutual funds, venture capital funds, foreign venture capital investors, group investment schemes, Foreign Institutional Investors, Portfolio Managers and Custodians.
Integrated Surveillance Department: This department takes care of monitoring market activity by means of market systems, data from other divisions and analytical software.
Investigations Department: This division conducts investigations on potentially unlawful market activities and assists the enforcement department in taking action against violators.
Enforcement Department: This division handles the proceedings associated with regulatory action.
Legal Affairs Department: This division provides legal services to the Board and to its other divisions, as well as handles non-enforcement litigation.
Enquiries and Adjudication Department: This division takes care of quasi judicial issues.
Office of Investor Assistance and Education: This division handles investor complaints centrally and also acts as the focal point of investor education work.
General Services Department: This division supports all the internal operations of Securities and Exchange Board of India (SEBI).
Department of Economic and Policy Analysis: This division handles development of strategic action plan, analysis of market development, conducting periodic investor survey, etc
Office of the Chairman: This division takes care of administrative and other support as the Chairman may need. The functions include strategic planning, managing new initiatives, etc.
Information Technology Department: This division provides the technical support.
The Regional Offices: The Regional Office reports to the functional heads for certain departmental functions while reporting administratively to Executive Directors.

Powers of SEBI

Compel listing of securities by public companies.
Levy fees or any other fees to carry out the purposes of regulation.
Get explanation from recognized stock exchanges or their members.
Give approval to bye-laws of recognized stock exchanges.
Manage and regulate stock exchanges.
Direct enquiries to be made with regards to affairs of stock exchanges or their members.
Make or modify bye-laws of recognized stock exchanges.
Inspect the books of accounts of a intermediaries.
Inspect the books of recognized stock exchanges.

SEBI Functions

The functions of SEBI are divided into following:

Regulatory Functions

To regulate stock markets and self regulatory organizations.
To register and regulate stock brokers, sub-brokers, registrars of issues, merchant bankers, underwriters, etc.
To register and regulate the functioning of investment schemes such as mutual funds.
To monitor fraudulent and unfair trade techniques associated with securities market.
To monitor insider trading
To regulating substantial acquisition of shares and takeover of companies.

Developmental Functions of SEBI

Promoting investor education
Training of financial intermediaries
Performing research and publishing material beneficial to all market participants.
Encouraging fair practices
Promotion of self regulatory organizations

Important Guidelines Issued by SEBI

Several guidelines, rules, draft regulations, consultative papers, etc have been released by SEBI.

Rules and regulations concerning registration of intermediaries like transfer agents, bankers, debenture trustees, registrars to an issue, portfolio managers and investment advisors, brokers and sub-brokers, etc.
Rules and guidelines for merchant bankers indicating authorized activities, the authorization conditions and the terms of authorization.
Code of conduct for merchant bankers, the violation of which will make the merchant banker accountable for misconduct or unprofessional conduct.
Classification of merchant bankers.
Circular relating to supervision of merchant bankers. In case of non-compliance or defaults by merchant bankers they can be suspended or the authorization of merchant bankers can be cancelled.
Guidelines for portfolio management services which include elements like portfolio management activities, client relationship, investment fees, investment of client money, regular reports to clients and administrative powers of the SEBI in this regard.
Guidelines and suggestions for lead managers for allocation of responsibilities which demand that whenever there is more than one lead manager to an issue, allocation of the pre-issue and post-issue activities shall be appropriately made and information should be sent to SEBI.
Rules concerning acquisition of non-convertible part of debentures from the investors
Regulation for registrars and share transfer agents
Regulation with regards to insider trading
Rules and regulations for mutual funds and asset management companies
Regulations for acquisition of shares in listed companies
Consultative paper on free market pricing of capital issue
Guidelines on capital issues and Investor Protection as well as clarifications from time to time.
Rules regarding issue of securities by Development Financial Institutions
Creation of two advisory committees, one for primary market and the other for secondary market made up of people from profession, academic and investing public.

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Following are some important Acts, Regulations and Guidelines by SEBI:

Depositories Act.
Depositories and Participants Regulations.
SEBI Bankers to an Issue Regulations.
Debenture Trustees Regulations.
Foreign Institutional investors Regulations.
Prohibition of Insider Trading Regulation
SEBI Merchant Bankers Regulations.
Mutual Funds Regulations.
Registrars to an Issue and Share Transfer Regulations.
Stock Brokers and sub Brokers Regulations.
Substantial Acquisition and Takeover Regulations.
SEBI Buy-back of Securities Regulations
Underwriters Regulations.
Venture Capital Funds Regulations.

SEBI has enjoyed success as a regulator by pressing organized reforms aggressively and successively. SEBI has been acknowledged for swift movement towards making the markets digital and paperless. The main objective of SEBI is to provide investor protection.