sebi ppt on functions role objective and intresring facts

WORKING OF SEBI

FACULTY OF COMMERCE

SUBMITTED TO:

SUBMITTED BY :

Saiyam Jain142048

CONTENTS

• Origin & Growth

• Organization’s Structure

•Objectives of SEBI

•Functions of SEBI

•Powers of SEBI

•SEBI & Central Government

• Various Departments & their functions

• Current Board Members

• Few Cases

• Amendments

ORIGIN: GROWTH AND DEVELOPMENT

Controller of Capital Issues was the regulatory authority before SEBI came into existence; it derived authority from the Capital Issues (Control) Act, 1947.

In April 12, 1988 the SEBI was constituted as the regulator of capital markets in India under a resolution of the Government of India (as a non-statutory body).

It was later made a statutory body on April 4,1992 and it came to be known as the SEBI Act,1992.

The mission of SEBI is to make India as one of the best securities market in the world and SEBI as one of the most respected regulator in the world.

In the year of 1995, the SEBI was given additional statutory powers by the Government of India through an amendment to the Securities and Exchange Board of India Act 1992.

It is the apex body to develop and regulate the stock market in India.

It is known as the watchdog of Indian Capital Market.

Organization’s Structure

The Board shall consist of the following members,

namely:-

a) a Chairman

b) Two members, One from amongst the officials of the

Ministry of the Central Government dealing with Finance

and second from administration of the Companies Act,

1956.

c) One member from amongst the officials of the Reserve

Bank of India.

d) Five other members of whom at least three shall be the

whole-time members to be appointed by the central

Government .

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Management of the Board

Objectives of SEBI

The primary objective of SEBI is to promote

healthy and orderly growth -of the securities market

and secure investor protection. The objectives of

SEBI are as follows:

To protect the interest of investors, so that, there is a

steady flow of savings into the capital market.

To regulate the securities market and ensure fair

practices.

To promote efficient services by brokers, merchant

bankers, and other intermediaries, so that, they

become competitive and professional.

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Functions of SEBI

The SEBI Act, 1992 has entrusted

with two functions, they are

Regulatory functions And

Developmental functions

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Regulatory Functions

Regulation of stock exchange and self regulatory

organizations.

Registration and regulation of stock brokers, sub-brokers,

Registrars to all issues, merchant bankers, underwriters,

portfolio managers etc.

Registration and regulation of the working of collective

investment schemes including mutual funds.

Prohibition of fraudulent and unfair trade practices relating

to securities market.

Prohibition of insider trading

Regulating substantial acquisition of shares and takeover

of companies.

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Developmental Functions

Promoting investor’s education

Training of intermediaries

Conducting research and publishing

information useful to all market participants.

Promotion of fair practices

Promotion of self regulatory organizations

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Powers of SEBI

Power to call periodical returns from recognized

stock exchanges.

Power to compel listing of securities by public

companies.

Power to levy fees or other charges for carrying out

the purposes of regulation.

Power to call information or explanation from

recognized stock exchanges or their members.

Power to grant approval to bye-laws of recognized

stock exchanges.

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Powers of SEBI continue..

Power to control and regulate stock exchanges.

Power to direct enquiries to be made in relation to

affairs of stock exchanges or their members.

Power to make or amend bye-laws of recognized

stock exchanges.

Power to grant registration to market intermediaries.

Power to declare applicability of Section 17 of the

Securities Contract (Regulation) Act 1956, in any

State or area, to grant licenses to dealers in

securities.

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SEBI & Central Govt.

The Central Government has power to issuedirections to SEBI Board, supersede the Board, ifnecessary and to call for returns and reports as andwhen necessary. The Central Government has alsopower to give any guideline or to make regulationsand rules for SEBI and its operations.

The activities of SEBI are financed by grants fromCentral Government, in addition to fees, charges etc.collected by SEBI. The fund called SEBI GeneralFund is set up, to which, all fees, charges and grantsare credited. This fund is used to meet the expensesof the Board and to pay salary of staff and membersof the body.

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Various departments under SEBIS. No. Name of Dept.

1. MARKET INTERMEDIARIES REGULATION AND

SUPERVISION DEPARTMENT (MIRSD)

2. DERIVATIVES AND NEW PRODUCTS DEPARTMENT

(DNPD)

3. INVESTMENT MANAGEMENT DEPARTMENT (IMD)

4. INVESTIGATIONS DEPARTMENT (IVD)

5. LEGAL AFFAIRS DEPARTMENT (LAD)

6. OFFICE OF INVESTOR ASSISTANCE & EDUCATION

(OIAE)

7. DEPARTMENT OF ECONOMIC & POLICY ANALYSIS

(DEPA)

8. INFORMATION TECHNOLOGY DEPARTMENT (ITD)12

Various departments under SEBI continue…

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S. No. Name of Dept.

9. MARKET REGULATION DEPARTMENT (MRD)

10. CORPORATION FINANCE DEPARTMENT (CFD)

11. INTEGRATED SURVEILLANCE DEPARTMENT (ISD)

12. ENFORCEMENT OF DEPARTMENT (EFD)

13. ENQUIRIES & ADJUDICATION DEPARTMENT (EAD)

14. GENERAL SERVICES DEPARTMENT (GSD)

15. OFFICE OF THE CHAIRMEN (OCH)

16. THE REGIONAL OFFICES (RO’s)

Regulation by SEBI: Recent CasesVEDANTA-CAIRN ISSUE

SEBI has not yet cleared Vedanta group's open offer for Cairn India, a mandatory requirement for conclusion of London-based mining group's $9.6 billion acquisition to foray into oil sector.

London-listed Vedanta had in August last year agreed to buy up to 51 per cent stake in Cairn India from Cairn Energy Plc. Following the acquisition, its group firm Sesa Goa was to make an open offer for buying an additional 20 per cent in the company that owns India's largest on land oil field.

But the company could not make the open offer following an oil ministry intervention with SEBI. The ministry said the deal was contingent upon government approval, which is still under process.

SEBI is holding back the approval for the open offer as the government is yet to give its go ahead.

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Regulation by SEBI: Recent CasesDECCAN-CHRONICLE HOLDINGS Ltd. ISSUE

Sebi allowed the Deccan Chronicle Holdings Ltd to buy-back3.45 crore shares or 14.17 per cent equity from the market at anestimated cost of Rs 270 crore.

This will be the second time the Deccan Chronicle would comeout with an offer to buy-back its shares, following which theequity of the promoters in the company could go up to 73.83 percent from 63.37 per cent currently.

SEBI, while exempting Deccan Chronicle from making themandatory public announcement before coming out with the buy-back offer, has, however, asked the company "not of seek anyfurther exemption pursuant to any further buy-back".

Referring to the general issue of companies buying back their ownshares, Sebi order said, "repeated buy-back offers by a company isnot something that Sebi, as a regulator, would like to encourage,given the fact that it would be misused by entities to consolidatetheir holding at the expense of the company.

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Current board members

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Current board members continue..

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Current board members continue..

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AMMENDMENTS

SEBI Act, 1992 was amended in the years 1995, 1999 and 2002 to meet the requirements of changing needs of the securities market.

SEBI AMENDMENT BILL, 1995:-

Mainly focussed on Foreign Institutional Investors (FII).

Given additional statutory powers.

SEBI AMENDMENT BILL, 1999:-

Included derivates & instruments of collective investment schemes under the definition of securities.

Enable RBI to regulate the transactions in government securities & other related instruments as may be specified by the Government.

SEBI AMENDMENT BILL, 2002:-

Gave more teeth to SEBI to punish market offenders through Serious Fraud Office (SFO).

Power to search & seize books, registers & documents of intermediaries or any other persons associated with the securities market.

Fine of 25 crores for insider trading.

Board strength increased from six to nine.

SEBI AMENDMENT BILL, 2013:-

Passed by the Rajya Sabha on 5th September.

Widen the area for eligible candidates for the post of Presiding Officer at the Securities Appellate Tribunal (SAT).

The Bill extends eligibility criteria for SAT Presiding Officer’s role & includes sitting or retired Judges of a High Court with a minimum service of 7 years.

REGIONAL OFFICES1. New Delhi

2. Kolkata

3. Chennai

4. Ahmadabad

1. Jaipur

2. Bangalore

3. Guwahati

4. Bhubaneswar

5. Patna

6. Kochi

7. Chandigarh SEBI Bhavan, Mumbai Headquarters (in Bandra Kurla Complex)

Local Offices

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