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Securities and Exchange Board of India (SEBI)

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:
  1. About Securities and Exchange Board of India
  2. Functions of SEBI
  3. 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

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October 2022
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