Securities and Exchange Board of India (SEBI) - UPSC Notes

Securities and Exchange Board of India is an autonomous organization that works under overall administrative supervision of the Union Finance Ministry and is accountable to the Parliament. It is an important topic for the IAS Exam. This article will talk about the functions and structural organisation of SEBI. Candidates can also download the notes PDF at the end of this article.

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Overview of the SEBI

The Securities and Exchange Board of India owned by the Government of India was established on 12th April, 1992 under the Securities and Exchange Board of India Act, 1992 to protect the interests of the investors in securities along with promoting and regulating the securities market. Headquartered in Mumbai, the Securities and Exchange Board of India (SEBI) has four regional offices located in Ahmedabad, Chennai, Delhi and Kolkata. SEBI was initially formed in the year 1988 as a non-statutory body for the regulation of securities market and later acquired statutory status on 30th January, 1992. To know more about SEBI, refer to the table given below:

SEBI
SEBI full form Securities And Exchange Board of India
Year of formation 1988
Headquarters Mumbai, Maharashtra
SEBI Chairman Ajay Tyagi
Sector Securities Market

Formation of SEBI

 

Securities and Exchange Board of India (SEBI) was first established as a non-statutory body in 1988 for  regulation of the securities market. It acquired the statutory powers on 30th January 1992 in accordance with the SEBI Act 1992. SEBI became an autonomous body on 12 April 1992 and was soon constituted as the regulator of capital markets under the Government of India. The headquarters of Security and Exchange Board of India is located in Mumbai, Maharashtra and has four regional offices in New Delhi, Kolkata, Chennai and Ahmedabad. 

During the Financial Year 2013-2014, SEBI opened several local offices in the cities namely- Jaipur, Bangalore, Guwahati, Bhubaneshwar, Patna, Kochi and Chandigarh.

For more notes about the Indian Economy, visit the linked article

Structural Organisation of SEBI

SEBI is an autonomous organization that works under the administration of the Union Finance Ministry. The Security and Exchange Board of India (SEBI) is managed by the following members:

  1. The chairman was nominated by the Union Government of India.
  2. Two members, i.e., Officers from Union Finance Ministry.
  3. One member from the Reserve Bank of India.
  4. The remaining five members are nominated by the Union Government of India. Three of the five members should be full-time members.

Ajay Tyagi is the current SEBI Chairman who was appointed to take charge of the chairman office on 10 February 2017 by replacing U K Sinha. Ajay Tyagi’s term was further extended in February 2020 for six more months.

To know about the Major Stock Exchanges in India, vist the linked article.

SEBI Functions & Powers

The scope of SEBI’s activities is rather wide. It is empowered to frame rules, regulations, guidelines and direction etc. in respect of both primary and secondary securities markets. Intermediaries and certain financial institutions operating in securities markets are also subjected to SEBI’s directions and norms. SEBI has the power to regulate the following branches:

  • Depositories, participants and custodians
  • Debenture trustees and trust deeds
  • Insider trading, FII’s merchant bankers and mutual funds
  • Portfolio managers, investment advisors, registrars to capital issues and share transfer agents
  • Stock broker, sub-brokers, underwriters, bankers to the issues and venture capital funds and
  • Substantial acquisition of shares and takeovers.

It also issues guidelines for disclosure of information and operational transparency for investor protection, pricing of issues, bonus and preferential issues and other financial instruments.

According to the Preamble of SEBI, one of the major functions of Security and Exchange Board of India is to protect the interests of investors in securities along with promoting the development and regulation of the securities market.

SEBI is also responsible for the needs of the following three groups which constitute the securities market:

  • Issuers of securities
  • Investors
  • Market intermediaries

Economy of India covers an important part of the UPSC Syllabus. Candidates preparing for UPSC 2020 should also keep a track of the latest current affairs to know about any new developments in the country. 

Securities and Exchange Board of India(SEBI):- Download PDF Here

For more UPSC related preparation materials and articles, visit the links given in the table below:

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