What is the Securities and Exchange Board of India (SEBI)?
The most significant body regulating the Indian securities markets is the Securities and Exchange Board of India (SEBI). SEBI matches the Securities and Exchange Commission (SEC) of the United States. “To protect investors’ interests in securities and to promote the development and regulation of the securities market and for matters connected therewith or incidental thereto,” is its declared goal.
Creation of the SEBI
After the country’s parliament passed the Securities and Exchange Board of India Act, the Securities and Exchange Board of India was founded in its present form in April 1992. The Capital Issues (Control) Act of 1947, established only months before India won independence from the British, replaced the Controller of Capital Issues, which had been overseeing the securities markets.
The Bandra-Kurla Complex, a corporate neighborhood in Mumbai, is home to the SEBI headquarters. In addition, it maintains over a dozen local offices across cities, including Bangalore, Jaipur, Guwahati, Patna, Kochi, and Chandigarh, as well as regional offices in New Delhi, Kolkata, Chennai, and Ahmedabad.
The Charter of SEBI
As per its charter, SEBI is supposed to oversee three primary groups:
- The securities issuers
- Traders
- Market middlemen
In its regulatory function, the body writes laws and regulations; in its judicial capacity, it renders decisions and issues orders; and in its enforcement capacity, it conducts investigations and fines. For instance, the Board prohibited short sales from 2001 to 2008.
The parliament elects the Board of Directors that oversees SEBI, which consists of the chair, two officials from the Ministry of Finance, one representative from the Reserve Bank of India, and five other members.
Attacks on SEBI
Opponents claim that Securities and Exchange Board of Indiais opaque and shielded from direct public oversight. The only institutions that may limit its authority are the Supreme Court of India and the Securities Appellate Tribunal, which is composed of a three-judge bench. SEBI has been criticized on occasion by both organizations.
Nevertheless, Securities and Exchange Board of India has sometimes been forceful in enforcing penalties and implementing significant improvements. In reaction to the global financial crisis, it also formed the Financial Stability Board in 2009, giving it a more expansive mission than its predecessor to advance financial stability.
Conclusion
- Like the Securities and Exchange Commission in the United States, the Securities and Exchange Board of India (SEBI) is the primary regulator of the Indian securities market.
- In addition to its broad regulatory, investigation, and enforcement responsibilities, Securities and Exchange Board of Indiacan punish violators.
- Critics point out that SEBI lacks direct public accountability and transparency for an organization with such vast authority.
