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

The Securities and Exchange Board of India (SEBI) is the most important regulatory body of the securities market in the Republic of India.

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

The Securities and Exchange Board of India was established as a non-statutory regulatory body in the year 1988, but it was not given statutory powers until January 30, 1992, when the Securities and Exchange Board of India Act was passed by the Parliament of India. Its headquarters is at the business district at the Bandra Kurla Complex in Mumbai, but it also possesses Northern, Eastern, Southern and Western regional branch offices in the cities of New Delhi, Kolkata, Chennai and Ahmedabad, respectively. It also has small local branch offices in Bangalore, Jaipur, Guwahati, Bubaneshwar, Patna, Kochi, and Chandigarh.

The Securities and Exchange Board of India (SEBI) supplanted the Controller of Capital Issues, which hitherto had regulated the securities market in India, as per the Capital Issues (Control) Act of 1947, one of the first acts passed by the Parliament of India following its independence from the British Empire. It is run by its own members, which consist of the Chairman, who is elected by the Parliament of India, two officers from the Union Finance Ministry, one member from the Reserve Bank of India and five members who are elected by the Parliament with the Chairman.

SEBI in India is similar to the Securities and Exchange Commission (SEC) in the U.S.

Pros and Cons of SEBI

The Securities and Exchange Board of India’s stated objective is “to protect the interests of investors in securities and to promote the development of, and to regulate the securities market and for matters connected therewith or incidental thereto.” According to its charter, it is expected to be responsible to three main groups: the issuers of securities, investors, and market intermediaries. The body has somewhat nebulous powers, as it drafts regulations and statutes in its legislative capacity, passes rulings and orders in its judicial capacity, and conducts investigation and enforcement actions in its executive capacity.

Many criticize the regulatory body because it is insulated from direct accountability to the public. The only mechanisms to check its power are a Securities Appellate Tribunal, which consists of a panel of three judges, and a direct appeal to the Supreme Court of India. Fortunately for the people of India, the SEBI has been mostly benevolent in its use of its authority, issuing strong systematic reforms rapidly and aggressively with its unchecked power. For example, after the Great Recession of 2008 and the Satyam Fiasco, the SEBI was able to quickly take regulatory steps to mitigate the effects of these problems, stabilize the economy and take drastic steps to make sure such situations never occurred again.

  1. Foreign Institutional Investor ...

    Foreign institutional investors (FII) typically consist of large ...
  2. Calcutta Stock Exchange (CAL) .CL ...

    The Calcutta Stock Exchange (CSE) is the securities market in ...
  3. Participatory Notes

    Participatory notes are financial instruments required by investors ...
  4. Stock Market

    The stock market consists of the exchanges or OTC markets in ...
  5. National Commodities And Derivatives ...

    The National Commodities and Derivatives Exchange (NCDEX) is ...
  6. Bombay Stock Exchange (BSE)

    The Bombay Stock Exchange (BSE) is the first and largest securities ...
Related Articles
  1. Investing

    How India Makes Money

    India currently has the ninth largest nominal GDP (and third largest in PPP) in the world.
  2. Investing

    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.
  3. Investing

    Apple to Manufacture iPhones in India (AAPL)

    Foxconn close to signing deal to start $10 billion plant in the country.
  4. Investing

    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.
  5. Insights

    Apple iPhones Sold in India Are 40% More Expensive (AAPL, GOOG)

    Apple prides itself on bringing new technology to the masses every year, but it may be depending on older models to drive sales in its fastest growing market.
  6. Small Business

    Modi Announces Initiative to Boost Indian Startups

    India announces tax-breaks and other initiatives to push the startup climate in India and draw potential funding investors.
  7. Small Business

    The Funds Keep Flowing Into Indian Tech Startups

    Investors are increasingly turning their attention to Indian tech startup companies. Billions of dollars are flowing into the startup sector in India.
  8. Investing

    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.
  9. Insights

    India Is Eclipsing China's Economy As Brightest BRIC Star

    It seems fitting that on the occasion of Diwali – the Hindu “festival of lights” – India should emerge as the brightest star in the BRIC firmament.
  10. Small Business

    Cisco to Invest $100M in India’s Digital Push (CSCO, ORCL)

    Cisco's investment follows that of Oracle, which in February, announced a $400 million expansion of its India facility.
  1. 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 >>
  2. How are asset management firms regulated?

    Find out how the asset management industry is regulated and how those regulations fit within the broader scope of financial ... Read Answer >>
  3. What are some real life examples of absolute advantage?

    Learn about absolute advantage, comparative advantage and their impact on trade through a real-world example involving call ... Read Answer >>
  4. What's the difference between primary and secondary capital markets?

    In the primary market, investors buy securities directly from the company issuing them, while in the secondary market, investors ... Read Answer >>
Trading Center