The Securities and Exchange Board of India (SEBI) stands as the paramount regulator of securities markets in India, performing functions akin to the United States’ Securities and Exchange Commission (SEC). SEBI’s core mission revolves around protecting investor interests, promoting market development, and ensuring robust regulation of the securities market.
Key Highlights
- The Securities and Exchange Board of India (SEBI) serves as the leading regulatory authority overseeing India’s securities markets, similar to the SEC in the United States.
- SEBI boasts extensive regulatory, investigative, and enforcement powers, successfully imposing fines and other penalties on market violators.
- Despite its significant authority, SEBI faces criticism over transparency and public accountability concerns.
The Genesis of SEBI
SEBI emerged in its incumbent form in April 1992, following the enactment of the Securities and Exchange Board of India Act passed by the Indian parliament. This new body replaced the Controller of Capital Issues, which had previously regulated India’s securities markets under the Capital Issues (Control) Act of 1947, introduced just before India’s independence from British rule.
SEBI’s main office is situated in the bustling business district within the Bandra-Kurla Complex in Mumbai. Additionally, it maintains regional offices in New Delhi, Kolkata, Chennai, and Ahmedabad, and more than a dozen local offices across cities such as Bangalore, Jaipur, Guwahati, Patna, Kochi, and Chandigarh.
SEBI’s Charter and Responsibilities
SEBI’s official charter mandates its responsibility towards three principal groups:
- Securities issuers
- Investors
- Market intermediaries
In fulfilling its regulatory commitments, SEBI drafts regulations, enforces laws, conducts investigations, and delivers penalties when necessary. For instance, SEBI imposed a ban on short selling in the Indian market from 2001 to 2008.
The SEBI is governed by an extensive board of directors, including a chairperson appointed by the parliament, two members from the Ministry of Finance, one member from the Reserve Bank of India, and five others designated by parliamentary election.
Voices of Criticism
A section of critics argue that SEBI’s operations lack sufficient transparency and insulation from direct public accountability. The principal checks to SEBI’s power are the Securities Appellate Tribunal, a body of three judges, and the Supreme Court of India, each occasionally offering censure.
However, SEBI has demonstrated a proactive stance in reforming the market and enforcing strict measures when necessary. For example, in 2009, in the wake of the global financial crisis, SEBI established the Financial Stability Board to strengthen financial market stability.
With its aggressive policy measures and comprehensive regulatory landscape, SEBI continues to play a pivotal role in fostering a secure and efficient securities market in India.
References
- Securities And Exchange Board Of India. “Index”.
- Securities And Exchange Board Of India. “About SEBI-Establishment Of SEBI”.
- Securities And Exchange Board Of India. “The Capital Issues (Control) Act, 1947”.
- Securities And Exchange Board Of India. “Chapter IV-Powers And Functions Of The Board”.
- Securities And Exchange Board Of India. “Board Members”.
- Financial Stability Board. “History Of The FSB”.
