You may know about the role of Securities and Exchange Board of India (SEBI) if you are into financial and capital market for about sometime?

Most of us know that SEBI is just a regulatory body but in reality it plays a much wider role in our financial market.

SEBI

Securities and Exchange Board of India (SEBI) is an apex body, which maintains and regulates our capital market. It was established in the year 1988 by the Indian government. Later in the year 1992, it received the statutory powers and the status of fully autonomous body.

It has framed a set of regulations, bye-laws and surveillance system so as to provide the end users with safety and transparency while dealing in securities. It has introduced many regulatory measures and code of conduct for various intermediaries which include portfolio managers, brokers and sub-brokers, underwriters, merchant bankers and so on.

Role of SEBI

1. Restricts illegal practises

It forbids illegal and fraudulent practises of the firm which operate in the securities market.

2. Safeguard investor’s interest

It protect investors interest in the capital market through guidance and proper education. So if you have any complaint about anything related to capital market, you can simply visit sebi.gov.in to register your complaint.

3. Regulate working of exchanges

It regulates and keep a check on the workings of stock exchanges and other aspect of securities market.

4. Monitor the workings of mutual funds

It monitors and regulates the working of mutual funds. It keeps a tight supervision on their business operations and protects investors from any unfair practices.

5. Monitor the functioning of intermediaries

Keeps a tight check on the functioning of the intermediaries like merchant bankers, stock brokers and other intermediaries present in the capital market.

6. Regulate takeovers and acquisitions

They issue guidelines to regulate takeovers, mergers and acquisition of firms to protect investor’s interest.

7. Prohibition of insider activity

It prohibits insider activity and also restricts undesirable practice of brokers and other agents in the capital market.

8. Conducting audit

It conducts audit, inspection and other suitable measures to keep a check on the workings of stock exchanges and other intermediaries.
SEBI has played a really important role in regulating the capital markets and in the development of our overall economy.If you see the market value of NSE-listed companies combined together, it stands at Rs 92,09,386 crore as on January 2016 as compared to Rs 3,63,350 crore as on 1994-1995.

Now, let’s see how SEBI has played an active role in keeping a tight check on the scams and scandals in our economy.

There was a gradual increase in the number of scams held in our country since 1990’s and it was a common phenomenon every year in those days. However, the number of scams has also come down gradually in the last few years

Here’s a quick overview on the number of major scams held in our country-

SEBI has till date played a significant role in maintaining efficiency and transparency in the economy and has also introduced various products fulfilling the need of market participants.

Let’s hope that SEBI will keep playing the role in this manner to improve the workings in our capital market and make our economy free from any scams and frauds.

Keep learning!!