SEBI ACT 1992 UGC Net and other competitive Exam

Vol1

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Vol 2

SEBI ACT 1992 UGC Net and other competitive Exam

(1)This Act may be called the Securities and Exchange Board of India Act, 1992.

 (2) It extends to the whole of India.

 (3) It shall be deemed to have come into force on the 30th day of January, 1992.

AMMENDMENT

Securities and Exchange Board of India Act, 1992 (As amended by the Finance Act, 2021 (13 of 2021) w.e.f. April 1, 2021

Securities Contracts (Regulation) Act, 1956 (As amended by the International Financial Services Centres Authority Act, 2019 w.e.f. October 01, 2020

RULES and REGULATION of SEBI

1)SEBI (Procedure for Holding Inquiry and Imposing Penalties) Rules, 1995

2) SEBI (Annual Report) Rules, 1994

3) SEBI (Form of Annual Statement of Accounts and Records) Rules, 1994

4) SEBI (Appeal to Central Government) Rules, 1993

5) SEBI procedures for holding Enquiry  Rules 1995

6) Depositories Rule 1998

7) Securities contract Rules2000

 

8) Securities Appellate Tribunal procedures Rule2000

9)Securities Transaction Tax Rules 2004

10) Companies share capital and Debentures Rules

       2014

11) Companies  prospectus and allotment of Securities Rules 2014

12)SEBI Annual report Rules 

FUNCTIONS OF SEBI

To regulate the tasks entrusted on depositors, credit rating agencies

Custodians of securities

Foreign portfolio investors and other participants

To educate investors about securities markets and their intermediaries.

To prohibit fraudulent and unfair trade practices within the securities market and related to it

Powers of SEBI:

• To regulate and approve by-laws of stock exchanges.
• Inspect the books of accounts of recognized stock exchanges and call for periodical returns.
• Inspect the books of financial Intermediaries.
• Compel certain companies to get listed on one or more stock exchanges.
• To handle the registration of brokers.

MARKET CONTROLLED BY SEBI

Indian capital and securities market

SEBI is a statutory regulatory body established on the 12th of April, 1992. It monitors and regulates the Indian capital and securities market while ensuring to protect the interests of the investors, formulating regulations and guidelines. The head office of SEBI is at Bandra Kurla Complex, Mumbai.

Members  on the board of SEBI

The SEBI is managed by 9 board members, which consists of the following:
1. The chairman is nominated by the Union Government of India.
2. Two members, i.e., Officers from the Union Finance Ministry.
3. One member from the Reserve Bank of India.
4. The remaining five members are nominated by the Union Government of India, out of them at least three shall be whole-time members.

5 .Present Chairman is Ajay Tyagi.

Powers of SEBI

The powers of SEBI can be categorised into three divisions:

• Quasi-legislative

Its drafts regulation, i.e. It has the powers to frame rules and regulations to preserve the interests of the investors and keep malpractices away.

• Quasi-judicial

In this, SEBI can pass hearings & deliver judgements pertaining to fraud and other malpractices.

• Quasi-executive
• It can conduct investigation against violators; it has enforcement power and holds an authority to inspect books and records of accounts and other documents if they get suspicious about violation of regulations.

Functions of SEBI

Primarily, the function of SEBI can be categorised under three sections – protective, regulatory and developmental functions.

1. Protective functions

The actions taken by SEBI to protect and conserve the interest, rights and safety of the investors and other involved participants come under protective functions.

• Keeping a check on price rigging (manipulation of prices cause inflation or depression of the market price).
• Prohibit insider trading (any person connected with the company may have confidential information regarding prices of the securities which they may use for their benefit. This is called insider trading).
• Keep an eye on malpractices and unfair trade practices.
• Keep the investors updated and educated so that they can evaluate the securities and make profitable selections.

1. Regulatory functions

These functions keep an eye on the functioning and execution of laws of the businesses in the securities market. These basically include:

• Framing guidelines and code of conduct to maintain and regulate proper functioning of the financial intermediaries such as banks, brokers, advisors, etc.
• Regulating overtake of companies.
• Conducting inquiries and regular audits of stock exchanges.
• Registration and regulation of merchant bankers, stock brokers, sub-brokers, trustees etc.

1. Developmental functions

The function of SEBI is also to develop and promote activities to enhance business in stock exchanges. These include:

• Conducting and promoting training programs for intermediaries.
• Promote activities of stock exchange by adopting more affordable approach.
• Conducting regular research.
• Promote fair trading.
• Seeking and approving advanced technologies (internet trading).

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