A

PRESENTATION
ON

Presented to:
Ms. DIPALI PATEL

Presented by:
RONAK AKHANI(01)
JAYESH PATEL(32)
CHANDRAKANT PRAJAPATI (41)

INTRODUCTION
Formed: 12th April,1992
Established by: Government of India
Headquarters: Mumbai, Maharashtra

HISTORY
Initially SEBI was a non statutory body without any statutory

power.
However in 1995, the SEBI was given additional statutory power

by the Government of India through an amendment to the Security

and Exchange Board of India Act 1992.
In April, 1998 the SEBI was constituted as the regulator of capital

market in India under a resolution of the Government of India.

ESTABLISHMENT OF SEBI
The security and exchange board of India was established

on April 12, 1992 in accordance with the provisions of the

Securities and Exchange Board of India Act, 1992.
Its main function is to stop fraudulent activities of stock

market.

ORGANIZATION STRUCTURE
SEBI is working as a corporate sector.
Its activities are divided into five departments. Each department is headed

by an executive director.
The head office of SEBI is in Mumbai and it has branch office in Kolkata,

Chennai and Delhi.

SEBI has formed two advisory committees to deal with primary and

secondary markets.
These committees consist of market players, investors associations and

eminent persons.

SECURITIES AND EXCHANGE BOARD OF

INDIA ACT, 1992
An Act to provide for the establishment of a board to

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.

OBJECTIVES
The overall objectives of SEBI are to protect the interest of investors and to promote

the development of stock exchange and to regulate the activities of stock market. The
objectives of SEBI are:
1. To regulate the activities of stock exchange.
2. To protect the rights of investors and ensuring safety to their investment.
3. To prevent fraudulent and malpractices by having balance between self regulation

of business and its statutory regulations.

4. To regulate and develop a code of conduct for intermediaries such as brokers,

underwriters, etc.

Functions
The SEBI Act, 1992 has entrusted with two functions,

they are
Protective functions
Regulatory functions
Developmental functions

PROTECTIVE FUNCTIONS
It Checks Price Rigging
It Prohibits Insider trading
SEBI prohibits fraudulent and Unfair Trade

Practices

SEBI undertakes steps to educate investors

SEBI promotes fair practices and code of conduct in

security market

REGULATORY FUNCTIONS
Regulation of stock exchange and self regulatory organizations.
Registration and regulation of stock brokers, sub brokers, Registrars to all

issues, merchant bankers, underwriters, portfolio managers etc.

Registration and regulation of the working of collective investment schemes

including mutual funds,

Prohibition of fraudulent and unfair trade practices relating to securities market.
Prohibition of insider trading.
Regulating substantial acquisition of shares and takeover of companies.

DEVELOPMENT FUNCTIONS
(I) SEBI promotes training of intermediaries of the securities market.
(ii) SEBI tries to promote activities of stock exchange by adopting
flexible and adoptable approach in following way:
(a) SEBI has permitted internet trading through registered stock brokers.
(b) SEBI has made underwriting optional to reduce the cost of issue.
(c) Even initial public offer of primary market is permitted through stock
exchange.

PURPOSE AND ROLE OF SEBI

SEBI was set up with the main purpose of keeping a check on malpractices and protect

the interest of investors. It was set up to meet the needs of three groups.
1. Issuers:

For issuers it provides a market place in which they can raise finance fairly and easily.
2. Investors:

For investors it provides protection and supply of accurate and correct information.
3. Intermediaries:

For intermediaries it provides a competitive professional market.

POWERS
Power to call periodical returns from recognized stock exchanges.
Power to compel listing of securities by public companies.
Power to levy fees or other charges for carrying out the purposes of

regulation.
Power to call information or explanation from recognized stock

exchanges or their members.

Power to grant approval to bye-laws of recognized stock exchanges.

Cont
Power to control and regulate stock exchanges.
Power to direct enquiries to be made in relation to affairs of stock exchanges or

their members.
Power to make or amend bye-laws of recognized stock exchanges.
Power

to

grant

registration

to

market

intermediaries.

Power to declare applicability of Section 17 of the Securities Contract

(Regulation) Act 1956, in any State or area, to grant licenses to dealers in
securities.

SEBI & CENTRAL GOVT.

The Central Government has power to issue directions to SEBI Board, supersede

the Board, if necessary and to call for returns and reports as and when necessary.
The Central Government has also power to give any guideline or to make
regulations and rules for SEBI and its operations.

The activities of SEBI are financed by grants from Central Government, in addition

to fees, charges etc. collected by SEBI. The fund called SEBI General Fund is set
up, to which, all fees, charges and grants are credited. This fund is used to meet the
expenses of the Board and to pay salary of staff and members of the body.

SEBI has Regulated

Primary Market
Secondary Market
Mutual Funds and
Foreign Institutional Investments

Primary Market
Primary market of capital market plays a significant role

in helping mobilization of capital and investment

formation. Many types of intermediaries carry out this
role very effectively.

Secondary Market
Secondary market is a market where securities are traded

after initially being offered to the public in the primary

market and/or listed on the Stock Exchange. Maximum of
the trading is done in the secondary market.

Mutual Fund
Its a type collective investment that pools money from

many investors to buy stocks, bonds, short-term money

market instruments, and other securities
SEBI notified the regulation for the mutual fund 1993

Foreign Institution Investor

(a) securities in the primary and secondary markets

including shares, debentures of companies unlisted, listed

or to be listed on a recognized stock exchange in India;
(b) units of scheme floated by domestic mutual funds

including Unit Trust of India, whether listed on a

recognized stock exchange or not;

Th

y
k
n
a

u
o