{"id":5641,"date":"2025-09-07T19:26:32","date_gmt":"2025-09-07T13:56:32","guid":{"rendered":"https:\/\/lawjurist.com\/?p=5641"},"modified":"2025-09-07T19:40:55","modified_gmt":"2025-09-07T14:10:55","slug":"role-of-sebi-in-indian-securities-market","status":"publish","type":"post","link":"https:\/\/lawjurist.com\/index.php\/2025\/09\/07\/role-of-sebi-in-indian-securities-market\/","title":{"rendered":"ROLE OF SEBI IN INDIAN SECURITIES MARKET"},"content":{"rendered":"\t\t<div data-elementor-type=\"wp-post\" data-elementor-id=\"5641\" class=\"elementor elementor-5641\">\n\t\t\t\t<div class=\"elementor-element elementor-element-599004dd e-flex e-con-boxed e-con e-parent\" data-id=\"599004dd\" data-element_type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-5e99eabb elementor-widget elementor-widget-text-editor\" data-id=\"5e99eabb\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p>Prerna Upadhyay , B.A.L.L.B , School of law, Gautam Buddha University,Noida<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<div class=\"elementor-element elementor-element-d4d2c67 e-flex e-con-boxed e-con e-parent\" data-id=\"d4d2c67\" data-element_type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-a201bd4 elementor-widget elementor-widget-text-editor\" data-id=\"a201bd4\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<h2 data-start=\"214\" data-end=\"231\">Introduction<\/h2><p data-start=\"232\" data-end=\"887\">In the time 1992, the Securities and Exchange Board of India (SEBI) was established as a statutory body. It conducts examinations and imposes forfeitures on violators. SEBI was introduced to develop translucency in the Indian stock request and to concentrate on covering the stock request. It protects the interest of investors, issuers of securities, and request actors. SEBI has the authority to check the account books of stock exchanges, and inspection the books of request interposers similar as companies, banks, and registered brokers. The main ideal of SEBI is to make it safe for investors by enforcing rules and regulations in the stock request.<\/p><h2 data-start=\"894\" data-end=\"924\">Why was SEBI Established?<\/h2><p data-start=\"925\" data-end=\"1087\">SEBI was established to avoid fraud and maintain translucency in the request. During the 70s and 80s, the Indian stock request faced numerous frauds similar as:<\/p><ul data-start=\"1088\" data-end=\"1301\"><li data-start=\"1088\" data-end=\"1121\"><p data-start=\"1090\" data-end=\"1121\">Unofficial private placements<\/p><\/li><li data-start=\"1122\" data-end=\"1140\"><p data-start=\"1124\" data-end=\"1140\">Bigwig trading<\/p><\/li><li data-start=\"1141\" data-end=\"1190\"><p data-start=\"1143\" data-end=\"1190\">Non-adherence to vittles of the Companies Act<\/p><\/li><li data-start=\"1191\" data-end=\"1215\"><p data-start=\"1193\" data-end=\"1215\">Request manipulation<\/p><\/li><li data-start=\"1216\" data-end=\"1238\"><p data-start=\"1218\" data-end=\"1238\">Violation of rules<\/p><\/li><li data-start=\"1239\" data-end=\"1265\"><p data-start=\"1241\" data-end=\"1265\">Manipulation of prices<\/p><\/li><li data-start=\"1266\" data-end=\"1301\"><p data-start=\"1268\" data-end=\"1301\">Detention in delivery of shares<\/p><\/li><\/ul><p data-start=\"1303\" data-end=\"1483\">This is when SEBI steps in to make it safer for investors by tensing the rules and regulations. They bring in rules to make it transparent and operate totally in the stock request.<\/p><h2 data-start=\"1490\" data-end=\"1512\">Structure of SEBI<\/h2><p data-start=\"1513\" data-end=\"1560\">The structure of SEBI comprises nine members:<\/p><ul data-start=\"1561\" data-end=\"1781\"><li data-start=\"1561\" data-end=\"1615\"><p data-start=\"1563\" data-end=\"1615\">A Chairman, named by the Union Government of India<\/p><\/li><li data-start=\"1616\" data-end=\"1671\"><p data-start=\"1618\" data-end=\"1671\">Two representatives from the Union Finance Ministry<\/p><\/li><li data-start=\"1672\" data-end=\"1725\"><p data-start=\"1674\" data-end=\"1725\">One representative from the Reserve Bank of India<\/p><\/li><li data-start=\"1726\" data-end=\"1781\"><p data-start=\"1728\" data-end=\"1781\">Five members named by the Union Government of India<\/p><\/li><\/ul><p data-start=\"1783\" data-end=\"1933\">SEBI has different departments and all the departments are controlled by the head of the department. There are around twenty departments under SEBI.<\/p><p data-start=\"1935\" data-end=\"1971\"><strong data-start=\"1935\" data-end=\"1969\">Some of these departments are:<\/strong><\/p><ul data-start=\"1972\" data-end=\"2183\"><li data-start=\"1972\" data-end=\"2006\"><p data-start=\"1974\" data-end=\"2006\">Profitable and policy analysis<\/p><\/li><li data-start=\"2007\" data-end=\"2022\"><p data-start=\"2009\" data-end=\"2022\">Pot finance<\/p><\/li><li data-start=\"2023\" data-end=\"2041\"><p data-start=\"2025\" data-end=\"2041\">Mortal coffers<\/p><\/li><li data-start=\"2042\" data-end=\"2078\"><p data-start=\"2044\" data-end=\"2078\">Debt and cold-blooded securities<\/p><\/li><li data-start=\"2079\" data-end=\"2103\"><p data-start=\"2081\" data-end=\"2103\">Investment operation<\/p><\/li><li data-start=\"2104\" data-end=\"2119\"><p data-start=\"2106\" data-end=\"2119\">Enforcement<\/p><\/li><li data-start=\"2120\" data-end=\"2137\"><p data-start=\"2122\" data-end=\"2137\">Legal affairs<\/p><\/li><li data-start=\"2138\" data-end=\"2183\"><p data-start=\"2140\" data-end=\"2183\">Commodity derivations request regulations<\/p><\/li><\/ul><h2 data-start=\"2190\" data-end=\"2214\">SEBI as a Regulator<\/h2><p data-start=\"2215\" data-end=\"2374\">As a controller of the capital request, SEBI aims to produce an atmosphere that encourages the integrated and accessible operation of the securities request.<\/p><h3 data-start=\"2376\" data-end=\"2399\">Key Stakeholders:<\/h3><ul data-start=\"2400\" data-end=\"2696\"><li data-start=\"2400\" data-end=\"2483\"><p data-start=\"2402\" data-end=\"2483\"><strong data-start=\"2402\" data-end=\"2425\">Securities issuers:<\/strong> Raise cash from numerous sources to support operations.<\/p><\/li><li data-start=\"2484\" data-end=\"2582\"><p data-start=\"2486\" data-end=\"2582\"><strong data-start=\"2486\" data-end=\"2500\">Investors:<\/strong> SEBI maintains an atmosphere free of misconduct and restores public confidence.<\/p><\/li><li data-start=\"2583\" data-end=\"2696\"><p data-start=\"2585\" data-end=\"2696\"><strong data-start=\"2585\" data-end=\"2623\">Plutocrat brokers and interposers:<\/strong> Ensure flawless and secure fiscal deals between issuers and investors.<\/p><\/li><\/ul><h2 data-start=\"2703\" data-end=\"2725\">Functions of SEBI<\/h2><h3 data-start=\"2727\" data-end=\"2755\">1. Defensive Functions<\/h3><ul data-start=\"2756\" data-end=\"2958\"><li data-start=\"2756\" data-end=\"2798\"><p data-start=\"2758\" data-end=\"2798\">Price manipulation examination by SEBI<\/p><\/li><li data-start=\"2799\" data-end=\"2826\"><p data-start=\"2801\" data-end=\"2826\">Stopping bigwig trading<\/p><\/li><li data-start=\"2827\" data-end=\"2872\"><p data-start=\"2829\" data-end=\"2872\">Encouraging the use of ethical behaviours<\/p><\/li><li data-start=\"2873\" data-end=\"2896\"><p data-start=\"2875\" data-end=\"2896\">Informing investors<\/p><\/li><li data-start=\"2897\" data-end=\"2958\"><p data-start=\"2899\" data-end=\"2958\">Proscribing trade practices that are deceptive or illegal<\/p><\/li><\/ul><h3 data-start=\"2960\" data-end=\"2989\">2. Regulatory Functions<\/h3><ul data-start=\"2990\" data-end=\"3289\"><li data-start=\"2990\" data-end=\"3071\"><p data-start=\"2992\" data-end=\"3071\">Making norms and a law of conduct for correct operations in the stock request<\/p><\/li><li data-start=\"3072\" data-end=\"3101\"><p data-start=\"3074\" data-end=\"3101\">Regulating appropriations<\/p><\/li><li data-start=\"3102\" data-end=\"3130\"><p data-start=\"3104\" data-end=\"3130\">Inquiries about checkups<\/p><\/li><li data-start=\"3131\" data-end=\"3208\"><p data-start=\"3133\" data-end=\"3208\">Registration of interposers like brokers, sub-brokers, trafficker bankers<\/p><\/li><li data-start=\"3209\" data-end=\"3248\"><p data-start=\"3211\" data-end=\"3248\">Penalising companies for violations<\/p><\/li><li data-start=\"3249\" data-end=\"3289\"><p data-start=\"3251\" data-end=\"3289\">Registering credit standing agencies<\/p><\/li><\/ul><h3 data-start=\"3291\" data-end=\"3322\">3. Experimental Functions<\/h3><ul data-start=\"3323\" data-end=\"3561\"><li data-start=\"3323\" data-end=\"3351\"><p data-start=\"3325\" data-end=\"3351\">Training the interposers<\/p><\/li><li data-start=\"3352\" data-end=\"3407\"><p data-start=\"3354\" data-end=\"3407\">Encouraging fair business and reducing malpractices<\/p><\/li><li data-start=\"3408\" data-end=\"3490\"><p data-start=\"3410\" data-end=\"3490\">Conducting exploration into the benefits of encouraging tone-regulating groups<\/p><\/li><li data-start=\"3491\" data-end=\"3532\"><p data-start=\"3493\" data-end=\"3532\">Sale of MFs directly through a broker<\/p><\/li><li data-start=\"3533\" data-end=\"3561\"><p data-start=\"3535\" data-end=\"3561\">Carrying out exploration<\/p><\/li><\/ul><h2 data-start=\"3568\" data-end=\"3604\">Mutual Fund Regulations by SEBI<\/h2><p data-start=\"3605\" data-end=\"3714\">To cover the interests of investors, SEBI issued regulations and established norms for collective finances.<\/p><p data-start=\"3716\" data-end=\"3763\"><strong data-start=\"3716\" data-end=\"3761\">Five major orders of collective finances:<\/strong><\/p><ol data-start=\"3764\" data-end=\"3848\"><li data-start=\"3764\" data-end=\"3783\"><p data-start=\"3767\" data-end=\"3783\">Equity schemes<\/p><\/li><li data-start=\"3784\" data-end=\"3808\"><p data-start=\"3787\" data-end=\"3808\">Debt relief schemes<\/p><\/li><li data-start=\"3809\" data-end=\"3829\"><p data-start=\"3812\" data-end=\"3829\">Mongrel schemes<\/p><\/li><li data-start=\"3830\" data-end=\"3848\"><p data-start=\"3833\" data-end=\"3848\">Other schemes<\/p><\/li><\/ol><h2 data-start=\"3855\" data-end=\"3872\">Role of SEBI<\/h2><h3 data-start=\"3874\" data-end=\"3898\">1) Regulatory Part<\/h3><p data-start=\"3899\" data-end=\"4011\">Ensures fair and transparent dealings in securities, regulates players like stockbrokers and merchant bankers.<\/p><h3 data-start=\"4013\" data-end=\"4041\">2) Administrative Part<\/h3><p data-start=\"4042\" data-end=\"4137\">Supervises and monitors operations of players in the securities request to ensure compliance.<\/p><h3 data-start=\"4139\" data-end=\"4165\">3) Experimental Part<\/h3><p data-start=\"4166\" data-end=\"4309\">Promotes development of the securities request by introducing new products, encouraging foreign investment, and promoting investor education.<\/p><h3 data-start=\"4311\" data-end=\"4344\">4) Investor Protection Part<\/h3><p data-start=\"4345\" data-end=\"4482\">Prevents bigwig trading and fraudulent practices, ensures accurate information is given to investors, and provides grievance redressal.<\/p><h3 data-start=\"4484\" data-end=\"4509\">5) Enforcement Part<\/h3><p data-start=\"4510\" data-end=\"4632\">SEBI has power to impose penalties, initiate legal proceedings, suspend\/cancel registration, and investigate misconduct.<\/p><h3 data-start=\"4634\" data-end=\"4667\">6) Request Development Part<\/h3><p data-start=\"4668\" data-end=\"4798\">Introduces new products like equity derivations, allows short-selling, enables algorithmic trading, and encourages SME listings.<\/p><h3 data-start=\"4800\" data-end=\"4844\">7) Promoting Translucency and Exposure<\/h3><p data-start=\"4845\" data-end=\"4961\">Mandates listed companies to provide timely information including financial statements and board meeting outcomes.<\/p><h3 data-start=\"4963\" data-end=\"5003\">8) Promoting Commercial Governance<\/h3><p data-start=\"5004\" data-end=\"5112\">Lays down rules for independent directors, audit panels, and governance structures to ensure transparency.<\/p><h3 data-start=\"5114\" data-end=\"5153\">9) Regulating Collective Finances<\/h3><p data-start=\"5154\" data-end=\"5244\">Monitors performance of collective finances and ensures compliance with SEBI guidelines.<\/p><h3 data-start=\"5246\" data-end=\"5289\">10) Regulating Credit Rating Agencies<\/h3><p data-start=\"5290\" data-end=\"5382\">Lays guidelines for registration, functioning, and monitoring of credit standing agencies.<\/p><h3 data-start=\"5384\" data-end=\"5420\">11) Regulating Insider Trading<\/h3><p data-start=\"5421\" data-end=\"5541\">Monitors for insider trading cases, imposes penalties, suspends trading, and initiates criminal proceedings if needed.<\/p><h3 data-start=\"5543\" data-end=\"5595\">12) Promoting Investor Education and Awareness<\/h3><p data-start=\"5596\" data-end=\"5682\">Launches campaigns to educate investors and provides grievance redressal mechanisms.<\/p><h3 data-start=\"5684\" data-end=\"5720\">13) Regulating Stock Exchanges<\/h3><p data-start=\"5721\" data-end=\"5789\">Ensures efficient functioning and transparency of stock exchanges.<\/p><h3 data-start=\"5791\" data-end=\"5831\">14) Regulating Foreign Investments<\/h3><p data-start=\"5832\" data-end=\"5900\">Frames guidelines for foreign investments and monitors compliance.<\/p><h2 data-start=\"5907\" data-end=\"5942\">Recent Reforms and Initiatives<\/h2><ul data-start=\"5943\" data-end=\"6250\"><li data-start=\"5943\" data-end=\"5983\"><p data-start=\"5945\" data-end=\"5983\">Introduction of T+1 settlement cycle<\/p><\/li><li data-start=\"5984\" data-end=\"6020\"><p data-start=\"5986\" data-end=\"6020\">Stricter disclosure requirements<\/p><\/li><li data-start=\"6021\" data-end=\"6057\"><p data-start=\"6023\" data-end=\"6057\">Strengthened ESG reporting norms<\/p><\/li><li data-start=\"6058\" data-end=\"6111\"><p data-start=\"6060\" data-end=\"6111\">Enhanced monitoring of crypto-related investments<\/p><\/li><li data-start=\"6112\" data-end=\"6153\"><p data-start=\"6114\" data-end=\"6153\">Stricter rules on algorithmic trading<\/p><\/li><li data-start=\"6154\" data-end=\"6212\"><p data-start=\"6156\" data-end=\"6212\">Revised norms on buybacks and shareholding disclosures<\/p><\/li><li data-start=\"6213\" data-end=\"6250\"><p data-start=\"6215\" data-end=\"6250\">Improved whistleblower mechanisms<\/p><\/li><\/ul><h2 data-start=\"6257\" data-end=\"6305\">SEBI\u2019s Role in Financial Market Development<\/h2><ol data-start=\"6306\" data-end=\"6490\"><li data-start=\"6306\" data-end=\"6333\"><p data-start=\"6309\" data-end=\"6333\">Enhancing Transparency<\/p><\/li><li data-start=\"6334\" data-end=\"6390\"><p data-start=\"6337\" data-end=\"6390\">Introduction of New Instruments (ETFs, derivatives)<\/p><\/li><li data-start=\"6391\" data-end=\"6426\"><p data-start=\"6394\" data-end=\"6426\">Corporate Governance Standards<\/p><\/li><li data-start=\"6427\" data-end=\"6464\"><p data-start=\"6430\" data-end=\"6464\">Education and Awareness Programs<\/p><\/li><li data-start=\"6465\" data-end=\"6490\"><p data-start=\"6468\" data-end=\"6490\">Curbing Malpractices<\/p><\/li><\/ol><h2 data-start=\"6497\" data-end=\"6512\">Conclusion<\/h2><p data-start=\"6513\" data-end=\"6882\">SEBI plays a critical part in the functioning of the securities request in India. It regulates colorful players in the request, ensures fair and transparent dealings in securities, and protects the interests of investors. SEBI also plays a experimental part in promoting and developing the securities request and has the power to apply its regulations and guidelines.<\/p><p data-start=\"6884\" data-end=\"7232\">Its sweats have helped in making the securities request in India more effective, transparent, and investor-friendly. SEBI stands for the Securities and Exchange Board of India. It monitors stock exchanges and brokers, helps prevent fraud and bigwig trading, ensures companies give accurate information, and fosters trust and safety in the market.<\/p><p data-start=\"7234\" data-end=\"7507\">SEBI serves as the guardian of the Indian securities market, ensuring fairness, transparency, and investor confidence. Its continuous reforms and proactive measures contribute to the robust growth of India\u2019s capital markets, attracting both domestic and global investors.<\/p><hr data-start=\"7509\" data-end=\"7512\" \/><h2 data-start=\"7514\" data-end=\"7529\">References<\/h2><ol data-start=\"7530\" data-end=\"7965\"><li data-start=\"7530\" data-end=\"7617\"><p data-start=\"7533\" data-end=\"7617\">Securities and Exchange Board of India, <a class=\"decorated-link cursor-pointer\" target=\"_new\" rel=\"noopener\" data-start=\"7573\" data-end=\"7615\">www.sebi.gov.in<\/a><\/p><\/li><li data-start=\"7618\" data-end=\"7716\"><p data-start=\"7621\" data-end=\"7716\">Companies Act, 2013, Ministry of Corporate Affairs \u2013 <a class=\"decorated-link\" href=\"https:\/\/www.mca.gov.in\" target=\"_new\" rel=\"noopener\" data-start=\"7674\" data-end=\"7714\">www.mca.gov.in<\/a><\/p><\/li><li data-start=\"7717\" data-end=\"7808\"><p data-start=\"7720\" data-end=\"7808\">Indian Kanoon, SEBI Regulations \u2013 <a class=\"decorated-link\" href=\"https:\/\/indiankanoon.org\" target=\"_new\" rel=\"noopener\" data-start=\"7754\" data-end=\"7806\">https:\/\/indiankanoon.org<\/a><\/p><\/li><li data-start=\"7809\" data-end=\"7887\"><p data-start=\"7812\" data-end=\"7887\">NSE India, SEBI Guidelines \u2013 <a class=\"decorated-link cursor-pointer\" target=\"_new\" rel=\"noopener\" data-start=\"7841\" data-end=\"7885\">www.nseindia.com<\/a><\/p><\/li><li data-start=\"7888\" data-end=\"7965\"><p data-start=\"7891\" data-end=\"7965\">BSE India, SEBI Circulars \u2013 <a class=\"decorated-link cursor-pointer\" target=\"_new\" rel=\"noopener\" data-start=\"7919\" data-end=\"7963\">www.bseindia.com<\/a><\/p><\/li><\/ol>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"<p>Prerna Upadhyay , B.A.L.L.B , School of law, Gautam Buddha University,Noida Introduction In the time 1992, the Securities and Exchange Board of India (SEBI) was established as a statutory body. It conducts examinations and imposes forfeitures on violators. SEBI was introduced to develop translucency in the Indian stock request and to concentrate on covering the [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":5141,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"_links":{"self":[{"href":"https:\/\/lawjurist.com\/index.php\/wp-json\/wp\/v2\/posts\/5641"}],"collection":[{"href":"https:\/\/lawjurist.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/lawjurist.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/lawjurist.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/lawjurist.com\/index.php\/wp-json\/wp\/v2\/comments?post=5641"}],"version-history":[{"count":7,"href":"https:\/\/lawjurist.com\/index.php\/wp-json\/wp\/v2\/posts\/5641\/revisions"}],"predecessor-version":[{"id":5650,"href":"https:\/\/lawjurist.com\/index.php\/wp-json\/wp\/v2\/posts\/5641\/revisions\/5650"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/lawjurist.com\/index.php\/wp-json\/wp\/v2\/media\/5141"}],"wp:attachment":[{"href":"https:\/\/lawjurist.com\/index.php\/wp-json\/wp\/v2\/media?parent=5641"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/lawjurist.com\/index.php\/wp-json\/wp\/v2\/categories?post=5641"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/lawjurist.com\/index.php\/wp-json\/wp\/v2\/tags?post=5641"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}