The responsibility for regulating the securities market is shared by the Securities and ExchangeBoard of India (SEBI), the Reserve Bank of India (RBI), the Department of Economic Affairs (DEA)of the Ministry of Finance and Ministry of Corporate Affairs (MCA).
Securities Exchange Board of India (SEBI):
The Securities and Exchange Board of India (SEBI), a statutory body appointed by an Act ofParliament (SEBI Act, 1992), is the chief regulator of securities markets in India. It was established in the year 1988 and given statutory powers on 30 January 1992 through the SEBI Act, 1992. SEBI functionsunder the Ministry of Finance.
The main objective of SEBI is to facilitate growth anddevelopment of the capital markets and to protect the interest of all the investors.
Hence they have the tagline: SEBI-Har investor kitaaqat!’
Initially SEBI was a non-statutory body without any statutory power. However, in 1992, the SEBI was given additional statutory power by the Government of India through an amendment to the Securities and Exchange Board of India Act, 1992. In April 1988 the SEBI was constituted as the regulator of capital markets in India under a resolution of the Government of India. The SEBI is managed by its members, which consists of following:
The chairman who is nominated by Union Government of India.Two members, i.e., Officers from Union Finance Ministry. One member from the Reserve Bank of India. The remaining five members are nominated by Union Government of India, out of them at least three shall be whole-time members.
Chairman:
Shri Ajay Tyagi was appointed chairman on 10thJanuary 2017 replacing Shri U K Sinha – and took charge on 1 March 2017.
(information as on 1 Nov 2017)
The list of previous Chairman:
(Information as on 01 Nov 2017)
| Name | From | To |
| Ajay Tyagi | 10 February 2017 | Present |
| U K Sinha | 18 February 2011 | 10 February 2017 |
| C B Bhave | 18 February 2008 | 18 February 2011 |
| M Damodaran | 18 February 2005 | 18 February 2008 |
| G N Bajpai | 20 February 2002 | 18 February 2005 |
| D R Mehta | 21 February 1995 | 20 February 2002 |
| S SNadkarni | 17 January 1994 | 31 January 1995 |
| G V Ramakrishna | 24 August 1990 | 17 January 1994 |
| Dr. S A Dave | 12 April 1988 | 24 August 1990 |
SEBI has enjoyed success as a regulator by pushing systematic reforms aggressively. SEBI is credited for quick movement towards making the markets electronic and paperless by introducing T+5 rolling cycle from July 2001 and T+3 in April 2002 and further to T+2 in April 2003. The rolling cycle of T+2 means, Settlement is done in 2 days after Trade date.
SEBI has been active in setting up the regulations as required under law. SEBI did away with physical certificates that were prone to postal delays, theft and forgery, apart from making the settlement process slow and cumbersome by passing Depositories Act, 1996.
SEBI has also been instrumental in taking quick and effective steps in light of the global meltdown and the Satyam fiasco.
In October 2011, it increased the extent and quantity of disclosures to be made by Indian corporate promoters. In light of the global meltdown, it liberalized the takeover code to facilitate investments by removing regulatory structures. In one such move, SEBI has increased the application limit for retail investors to ₹ 2 lakh, from ₹ 1 lakh at present.
Important:
- SEBI has been assigned the powers of recognizing and regulating the functions of stock exchanges. The Securities Contracts Regulation Act, 1956 is administered by SEBI.
- Stock exchanges have to submit periodic reports to the regulator and submit bye-laws for SEBI;’s approvals.
- Stock exchanges are required to send daily monitoring reports.
- SEBI has codified and notified regulations that cover all activities and intermediaries in the securities markets.
- SEBI makes routine inspections of the intermediaries functioning in the securities markets to ensure that they comply with prescribed standards.
- SEBI also oversees the functioning of primary markets.
- It can also order investigations into the operations of any of the constituents of the securities market for activities such as price manipulation, artificial volume creation, insider trading, violation of the takeover code or any other regulation, public issue related malpractice or other unfair practices.
- SEBI also oversees the functioning ofEligibility norms and rules to befollowed for a public issue of securities
- SEBI has set up surveillance mechanisms internally as well as prescribed certain surveillance standards at stock exchanges
- SEBI has the powers to call for information, summon persons for interrogation, examine witnesses and conduct search and seizure
- SEBI has laid down regulations to prohibit insider trading
- SEBI regulations require companies to appoint a compliance officer to enforce regulations.
- If an insider trading charge is proved through SEBI’s investigations, the penalties include monetary penalties, criminal prosecution, prohibiting persons from securities markets and declaring transaction(s) as void.