You must understand a few points concerning SEBI if you intend to invest in the current Indian stock market. This article uncovers the meaning of the Securities and Exchange Board of India (SEBI), what role it plays in protecting the investor’s interests, and more.
What is SEBI?
SEBI means Securities and Exchange Board of India. SEBI is a regulatory authority that was established on April 12,1988 and was given statutory power on January 30, 1992.
This organisation, since 1992, has been regulating and overseeing the capital markets and all the nation’s securities and commodities. Owned by the Government of India, SEBI aims to safeguard investor’s interests, regulate the capital market, and create a transparent market.
From mandating information disclosure to establishing and implementing guidelines and regulations, it has done everything in its power to secure the investor’s rights and interests.
History of SEBI
Before SEBI’s establishment, the securities market was subject to a patchwork of inconsistent and ineffective regulations from different government agencies. It was in 2014 when the Government of India handed greater power and regulatory authority to SEBI to further secure and monitor the capital market.
With more authoritative power, SEBI can now perform seizure and search operations and impose hefty penalties for fraudulent activities.
Objectives of SEBI
Investor Protection: SEBI’s primary objective is to safeguard the rights and interests of stock market participants. To accomplish its objectives, SEBI points these market participants or players in the right direction and protects their financial investments in the market.
Stop or Prevent Trading Frauds: The main idea behind establishing SEBI was to eradicate or prevent trading-related fraud or misconduct in the securities market. It aims to regulate the stock exchange operations and end all malpractices (like insider trading).
Promoting Proper And Fair Operation: SEBI’s mission is to ensure that the stock and capital markets operate efficiently. SEBI seeks to oversee financial intermediaries’ actions and manage the securities market.
Establish Balance: SEBI is in charge of ensuring that the statutory and self-regulation of the securities sector are balanced.
Organization Structure of SEBI
A department head oversees each of the numerous departments that make up SEBI’s organisational structure. SEBI comprises roughly 20 departments. These departmental structures comprise those dealing with the following:
There will be two officers from the Union Finance Ministry under this organisation. The Reserve Bank of India will provide one member for the committee. The Union Government of India will propose nominations for five additional members.
Functions & Power of SEBI
Functions of SEBI:
Functions of Securities Exchange Board of India (SEBI) |
Protective Functions |
Regulatory Functions |
Development Functions |
- Interdiction of unfair and dishonest business practices in the securities markets.
- Make stock insider trading illegal.
- Give orders to safeguard the interests of investors, middlemen, fair trade, and trade balance.
|
- Impose rules on the operation of stock exchanges and other financial markets
- Register and control the activities of the depository, participant, custodian of securities, foreign institutional investor, credit rating agency, and other intermediaries
- Registering and controlling the operation of mutual funds, venture capital funds, and other programs regulating significant share purchases and corporate takeovers
- Send out information requests and order inspections, as well as perform audits and enquiries.
|
- Interdiction of unfair and dishonest business practices in the securities markets.
- Make stock insider trading illegal.
- Give orders to safeguard the interests of investors, intermediaries, fair trade, and trade balance.
|
Powers of SEBI:
The SEBI has three main powers:
a) Quasi-Judicial
SEBI can issue rulings against fraud and other unethical behaviour in the securities industry. This powerful authority allows SEBI to promote and encourage fairness, transparency, and accountability easily.
b) Quasi-Executive
SEBI has the authority to enforce the rules and rulings imposed as well as to pursue legal action against those who violate them. SEBI can review and analyse your books of accounts and relevant documents if it finds any rule violations.
c) Quasi-Legislative
SEBI retains the authority to enact laws and regulations to safeguard investors’ interest and prevent misconduct.
Factors to Consider Before Investing in Mutual Funds
Before investing in a mutual fund scheme, even SEBI advised investors to get detailed information about the scheme, be informed about their rights and do their own due diligence Given below are some guidelines that investors should follow which may help them choose the right mutual fund:
Every investor must evaluate their financial situation before making a mutual fund investment. Potential participants should understand the risks involved with each plan. If such schemes don’t perform as expected, investors must carefully evaluate their investing goals and risk tolerance.
Every mutual fund website highlights scheme details and terms and conditions on its homepage. Asset allocation, risk tolerance, historical performance, expenditure ratio, tax, and other factors are included. Before investing, it is critical to comprehend every aspect .
An investor can diversify their portfolio and make investments in several plans to lower the risk involved with the financial market. Every investor’s investment objective and duration must be in sync for long-term, sustainable growth.
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.
Home Loans
Personal Loans
SME Loans
Business Loans - Udyog Plus 
Loan Against Securites
Loan Against Property
Mutual Fund
Stock and Securities
Wealth
Portfolio Management Services
Pension Funds
Life Insurance
Health Insurance
Wellness Solutions
Pay Bills
Pay for anything
Pay Anyone
Pay on Call
Payment Lounge
Credit Cards
1800-270-7000
AppStore
Playstore
Thank You
Message will change according to your requirement.