Context:
Recently, Madhabi Puri Buch, former whole-time member of the Securities and Exchange Board of India (SEBI), has been appointed as its new chairperson — the first woman to head the market regulator. She will hold the position for three years.
Relevance:
GS III- Indian Economy
Dimensions of the Article:
- About Securities and Exchange Board of India
- Functions of SEBI
- Powers of SEBI
About Securities and Exchange Board of India
- The Securities and Exchange Board of India (SEBI) is the regulator of the securities and commodity market in India owned by the Government of India.
- SEBI was established in 1988 and given Statutory Powers on 30 January 1992 through the SEBI Act, 1992.
The SEBI is managed by its members, which consists of the following:
- The chairman is nominated by the Union Government of India.
- Two members, i.e., Officers from the Union Finance Ministry.
- One member from the Reserve Bank of India.
- The remaining five members are nominated by the Union Government of India, out of them at least three shall be whole-time members.
SEBI has to be responsive to the needs of three groups, which constitute the market:
- issuers of securities
- investors
- market intermediaries
Functions of SEBI
SEBI has three functions rolled into one body: quasi-legislative, quasi-judicial and quasi-executive.
- It drafts regulations in its legislative capacity.
- It conducts investigation and enforcement action in its executive function.
- It passes rulings and orders in its judicial capacity.
- Though this makes it very powerful, there is an appeal process to create accountability.
- There is a Securities Appellate Tribunal which is a three-member tribunal.
- A second appeal lies directly to the Supreme Court.
Powers of SEBI
- To approve by−laws of Securities exchanges.
- To require the Securities exchange to amend their by−laws.
- Inspect the books of accounts and call for periodical returns from recognised Securities exchanges.
- Inspect the books of accounts of financial intermediaries.
- Compel certain companies to list their shares in one or more Securities exchanges.
- Registration of Brokers and sub-brokers
-Source: Indian Express
