Securities And Exchange Board Of India - SEBI

What is the 'Securities And Exchange Board Of India - SEBI'

The Securities and Exchange Board of India (SEBI) is the designated regulatory body for the finance and investment markets in India. The board plays a vital role in maintaining stable and efficient financial and investment markets by creating and enforcing effective regulation in India's financial marketplace. India's SEBI is similar to the U.S. Securities and Exchange Commission (SEC).

BREAKING DOWN 'Securities And Exchange Board Of India - SEBI'

The SEBI was established in 1988 but was only given regulatory powers on April 12, 1992, through the Securities and Exchange Board of India Act, 1992. It plays a key role in ensuring the stability of the financial markets in India, by attracting foreign investors and protecting Indian investors. SEBI was built by the government of India. Its headquarters is located at the Bandra Kurla Complex Business District found in Mumbai. It also has northern, eastern, southern and western regional offices.

SEBI's management is composed of its own members. Its management team consists of a chairman nominated by the Union Government of India, two members who are officers from the Union Finance Ministry, one member from the Reserve Bank of India and five other members who are also nominated by the Union Government of India.

Functions and Responsibilities

SEBI's Preamble describes in detail the functions and powers of the board. Its Preamble states that SEBI must "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." In this light, as a board, SEBI must be responsive and proactive to the needs and interest of the groups that constitute India's financial and investment markets: the investors, the market intermediaries and the issuers of securities.

SEBI is allowed to approve by-laws of stock exchanges. It is its job to require the stock exchange to follow its by-laws. SEBI also inspects the books of accounts of financial intermediaries and asks for regular returns from recognized stock exchanges. SEBI's role covers compelling particular companies to list their shares in stock exchanges. Aside from these, SEBI is tasked to manage the registration of brokers.

Ultimately, the board has three powers: quasi-judicial, quasi-legislative and quasi-executive. SEBI has the right to draft regulations under its legislative capacity, conduct investigations and impose action under its executive function, and pass new rules and orders under its judicial capacity. Despite these powers, the results of SEBI's functions still have to go through the Securities Appellate Tribunal and the Supreme Court of India.

RELATED TERMS
  1. Qualified Institutional Placement ...

    A designation of a securities issue given by the Securities and ...
  2. National Commodities And Derivatives ...

    India's largest and most recognized commodities exchange, which ...
  3. India ETF

    An exchange-traded fund that is based on a basket of securities ...
  4. Participatory Notes

    Financial instruments used by investors or hedge funds that are ...
  5. Reserve Bank Of India - RBI

    The central bank of India, which was established on April 1, ...
  6. Foreign Exchange Dealers Association ...

    An association of banks specializing in the foreign exchange ...
Related Articles
  1. ETFs & Mutual Funds

    An Introduction To The Indian Stock Market

    Emerging markets like India are fast becoming engines for future growth. Find out how to get in on the ground floor.
  2. Retirement

    Can You Retire in India with $200,000 in Savings?

    India's cost-of-living ranks among the lowest in the world, but retiring there presents some challenges unrelated to finances.
  3. ETFs & Mutual Funds

    India: Why it Might Pay to Be Bullish Right Now

    Many investors are bullish on India for all the right reasons. Does it present an investing opportunity?
  4. Investing

    Bombay Stock Exchange CEO Ashish Chauhan on India Rising

    India's largest stock exchange is hitting its stride. We talk with CEO Ashish Chauhan in New York.
  5. Retirement

    Understanding the Trends Driving India's Rise

    Numerous factors support India’s rise as a global superpower and will help the economy continue on a high and sustainable growth path.
  6. Markets

    How India Makes Money

    India currently has the ninth largest nominal GDP (and third largest in PPP) in the world.
  7. ETFs & Mutual Funds

    Top 4 Mutual Funds With Exposure to India

    Discover four mutual funds that invest in India and how these emerging market portfolios are poised to take advantage of rapid growth in the nation's economy.
  8. Markets

    3 Economic Challenges India Faces in 2016

    Learn why India's economy is held back by ingrained core problems that will take a generation to change despite recent favorable economic numbers.
  9. Markets

    Is India the Next Emerging Markets Superstar?

    With a shift towards manufacturing and services, India could be the next emerging market superstar. Here, we provide a detailed breakdown of its GDP.
  10. Markets

    The Brexit Will Benefit India: State Bank of India (SBIN.NS)

    Is this India's chance to increase trade with the U.K.?
RELATED FAQS
  1. Is short selling allowed in India?

    In March, 2001, the Securities and Exchange Board of India (SEBI) banned short selling in the Indian stock market. The ban ... Read Answer >>
  2. What risks does a Foreign Institutional Investor (FII) face?

    Read about the types of risks that a foreign institutional investor faces when trading in Indian stock exchanges and dealing ... Read Answer >>
  3. How can an individual investor get involved in FDIs (foreign direct investments) ...

    Understand what the term foreign direct investment (FDI) means, and learn how individual investors can get involved in FDI ... Read Answer >>
  4. How do mutual funds work in India?

    Find out how mutual funds work in India, including what types of funds are available, how they are structured and how they ... Read Answer >>
  5. Who decides when to print money in India?

    Find out the role of the Reserve Bank of India, or RBI, and the amount of authority given to the government. Learn who is ... Read Answer >>
  6. How does a Foreign Institutional Investor (FII) manage currency risk when investing ...

    Find out how foreign institutional investors protect themselves against inflation and currency risks when investing in international ... Read Answer >>
Hot Definitions
  1. Duration

    A measure of the sensitivity of the price (the value of principal) of a fixed-income investment to a change in interest rates. ...
  2. Dove

    An economic policy advisor who promotes monetary policies that involve the maintenance of low interest rates, believing that ...
  3. Cyclical Stock

    An equity security whose price is affected by ups and downs in the overall economy. Cyclical stocks typically relate to companies ...
  4. Front Running

    The unethical practice of a broker trading an equity based on information from the analyst department before his or her clients ...
  5. After-Hours Trading - AHT

    Trading after regular trading hours on the major exchanges. The increasing popularity of electronic communication networks ...
  6. Omnibus Account

    An account between two futures merchants (brokers). It involves the transaction of individual accounts which are combined ...
Trading Center