The stock market has grown over the year. The malpractices such as price rigging, new issue unofficial premium, delay in delivery of shares, stock exchange rules and regulations violation and others have also been noticed. Therefore, Government of India took decision to set-up a regulatory body SEBI (Securities Exchange Board of India).
SEBI is the regulator for the securities market in India. It is known as Securities Exchange Board of India. The regulation facilitates smooth functioning of security market. The statutory powers of SEBI are as follows :
· It protects interests of the investors in securities.
· It promotes the development of the securities market.
· It regulates the securities market.
SEBI may conduct enquiries, audits and inspection as well as adjudicate offences. It may register and regulate the market Intermediaries. It may also penalise in case of violation of the Act. SEBI aims at the development of orderly security markets.
Purpose and Role of SEBI
SEBI was formed to keep check on the malpractices and protect the interest of investors. It focused on protecting the interest of issuers, investors and Intermediaries as discussed below :
1) Issuers: SEBI provides safe market place to Issuers for raising the finance fairly and easily.
2) Investors: SEBI aimed at protecting the investors and supplying them accurate information.
3) Intermediaries: Professionally competitive market is provided by SEBI for the Intermediaries.
Objectives of SEBI
The objectives of the SEBI are :
1) The activities of stock exchange are regulated.
2) The rights of investors are protected. Safety is ensured for their investment.
3) Establishes the balance between self regulation and statutory regulations.
4) Development and regulation of Code of Conduct for brokers, underwriters and others.
Functions of SEBI
The functions of SEBI are:
1) Protective functions : SEBI aims at protecting the interest of the investors. It provides safety of investment. The malpractices, fraudulent activities and unfair trade practices are curbed. It promotes fair practices and provides code of conduct for fair operations.
2) Developmental functions : SEBI promotes training for securities market Intermediaries. Stock Exchanges are encouraged to adopt flexible and adoptable approach.
3) Regulatory functions : SEBI regulates the business in Stock Exchange. Regulations, Rules and Code of Conduct have been prepared to regulate the operations of the Intermediaries. It regulates the working of stock brokers, mutual funds, take-over of companies, etc. It also conducts audit of Stock Exchange.
