What is SEBI and its Role

SEBI acts as a guardian for the the investors and protect them from the unfair practices. SEBI full form is Securities and Exchange Board of India and its main function is to regulate and monitors the functions and working of the stock market so that it can protect the investors.

SEBI Establishment -

Its was established as a statutory body in 1992 because in 1980 there were tremendous amount of growth in the capital market which was the result of increased participation of the public.

And due to this sudden increase there were alot of malpractices happened and to overcome these unfair practices and illegal things, SEBI came in power to regulate the market and since then it became the gurardian of the investors.

Functions and Responsibilities -

According to the Preamble of the Securities and Exchange Board of India, the Board has the following basic functions to protect the interests of investors in securities and to promote the development and regulation of the securities market as well as for matters related to or incidental to the securities market.

Three groups comprise the market, and SEBI must respond to their needs :

• issuers of securities

• investors

• market intermediaries

SEBI combines three powers into one body: quasi-legislative, quasi-judicial, and quasi-executive. In its legislative role, it drafts regulations, in its executive role it conducts investigations and enforcement actions, and in its judicial role it passes rulings and orders.

Despite its power, it has an appeals process to ensure accountability. A Securities Appellate Tribunal is currently headed by Justice Tarun Agarwala, former Chief Justice of the Meghalaya High Court.

A second appeal lies directly with the Supreme Court. Streamlining disclosure requirements to international standards has been a priority for SEBI.

Role Of SEBI -

The SEBI's primary purpose is to monitor and improve the Indian capital market. In order to achieve this goal, the SEBI looks after the needs of three main financial participants:

1. Securities issuers: SEBI ensures that IPO and FPO issuances are conducted fairly and without fraudulent representations in any company listed on a stock exchange.
2. Protect Investors' Interests: SEBI is responsible for protecting investor interests and preventing unfair trade practices.

Protecting the interests of traders and investors is important for the survival of the market because they are important part of the market.

3.. Intermediaries: SEBI supervises the activities of financial intermediaries such as NBFCs, lenders, brokers, subbrokers, etc. They ensure smooth and secure transactions on the stock market.

Additionally, SEBI oversees and manages the complaint division of the recognized stock exchanges, dealing with investor grievances, investor education, and policy related to commodity derivatives.

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