Securities and Exchange Board of India

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Securities and Exchange Board of India

SEBI Bhavan, Mumbai headquarters

Agency overview

Formed

12 April 1992[1]

Jurisdiction

Government of India

Headquarters

Mumbai, Maharashtra

Employees

525 (2009)[2]

Agency executive

U. K. Sinha, Chairman

Website

www.sebi.gov.in

The Securities and Exchange Board of India (frequently abbreviated SEBI) is the regulator for the securities market in India. It was established on 12 April 1992 through the SEBI Act, 1992.[1]
Contents
[hide]

1 History 2 Organization structure 3 Functions and responsibilities

o o

3.1 Powers 3.2 SEBI Committees

4 Major achievements 5 Controversies 6 Corruption 7 See also 8 References 9 External links

[edit]History
It was formed officially by the Government of India in 1992 with SEBI Act 1992 being passed by the Indian Parliament. SEBI is headquartered in the business district of Bandra Kurla Complex in Mumbai, and has Northern, Eastern, Southern and Western regional offices in New Delhi,Kolkata, Chennai and Ahmedabad. Controller of Capital Issues was the regulatory authority before SEBI came into existence; it derived authority from the Capital Issues (Control) Act, 1947. Initially SEBI was a non statutory body without any statutory power. However in 1995, the SEBI was given additional statutory power by the Government of India through an amendment to the Securities and Exchange Board of India Act 1992. In April, 1998 the SEBI was constituted as the regulator of capital markets in India under a resolution of the Government of India. The SEBI is managed by its members, which consists of following: a) The chairman who is nominated by central government. b) Two members, i.e. officers of central ministry. c) One member from the RBI. d) The

remaining five members are nominated by the central government, out of whom at least three shall be wholetime members. The office of SEBI is situated at SEBI Bhavan, Bandra Kurla Complex, Bandra East, Mumbai- 400051, with its regional offices at Kolkata, Delhi,Chennai & Ahmedabad. It has recently opened local offices at Jaipur and Bangalore and is planning to open offices at Guwahati, Bhubaneshwar, Patna, Kochi and Chandigarh.

[edit]Organization

structure

Further information: SEBI Organization Chart Upendra Kumar Sinha was appointed chairman on 18 February 2011 replacing C. B. Bhave.[3] The Board comprises[4]

Name

Designation

Upendra Kumar Sinha

Chairman

Prashant Saran

Whole Time Member

Rajeev Kumar Agarwal Whole Time Member

Dr. Thomas Mathew

Joint Secretary, Ministry of Finance

V. K. Jairath magya

Member Appointed

Anand Sinha

Deputy Governor, Reserve Bank of India

Naved Masood

Secretary, Ministry of Corporate Affairs

List of former Chairmen[5]:

Name

From

To

C. B. Bhave

18 February 2008 18 February 2011

M. Damodaran

18 February 2005 18 February 2008

G. N. Bajpai

20 February 2002 18 February 2005

D. R. Mehta

21 February 1995 20 February 2002

S. S. Nadkarni

17 January 1994 31 January 1995

G. V. Ramakrishna 24 August 1990

17 January 1994

Dr. S. A. Dave

12 April 1988

23 August 1990

[edit]Functions

and responsibilities

SEBI has to be responsive to the needs of three groups, which constitute the market:

the issuers of securities the investors the market intermediaries.

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 and it passes rulings and orders in its judicial capacity. Though this makes it very powerful, there is an appeals process to create accountability. There is a Securities Appellate Tribunal which is a three-member tribunal and is presently headed by a former Chief Justice of a High court - Mr. Justice NK Sodhi. A second appeal lies directly to the Supreme Court.

[edit]Powers
For the discharge of its functions efficiently, SEBI has been invested with the necessary powers which are: 1. to approve bylaws of stock exchanges. 2. to require the stock exchange to amend their bylaws. 3. inspect the books of accounts and call for periodical returns from recognized stock exchanges. 4. inspect the books of accounts of a financial intermediaries. 5. compel certain companies to list their shares in one or more stock exchanges.

6. levy fees and other charges on the intermediaries for performing its functions. 7. grant license to any person for the purpose of dealing in certain areas. 8. delegate powers exercisable by it. 9. prosecute and judge directly the violation of certain provisions of the companies Act. 10. power to impose monetry penalties.

[edit]SEBI

Committees

1. Technical Advisory Committee 2. Committee for review of structure of market infrastructure institutions 3. Members of the Advisory Committee for the SEBI Investor Protection and Education Fund 4. Takeover Regulations Advisory Committee 5. Primary Market Advisory Committee (PMAC) 6. Secondary Market Advisory Committee (SMAC) 7. Mutual Fund Advisory Committee 8. Corporate Bonds & Securitization Advisory Committee 9. Takeover Panel 10. SEBI Committee on Disclosures and Accounting Standards (SCODA) 11. High Powered Advisory Committee on consent orders and compounding of offences 12. Derivatives Market Review Committee 13. Committee on Infrastructure Funds 14. Regulation over Financial Terms of Various Athourities.

[edit]Major

achievements

SEBI has enjoyed success as a regulator by pushing systemic reforms aggressively and successively. SEBI is credited for quick movement towards making the markets electronic and paperless by introducing T+5 rolling cycle from July 2001 and T+3 in April 2002 and further to T+2 in April 2003. The rolling cycle of T+2[6] means, Settlement is done in 2 days after Trade date.[7] SEBI has been active in setting up the regulations as required under law. SEBI has also been instrumental in taking quick and effective steps in light of the global meltdown and the Satyam fiasco.[citation needed] In October 2011, it increased the extent and quantity of disclosures to be made by Indian corporate promoters.[8] In light of the global meltdown, it liberalised the takeover code to facilitate investments by removing regulatory structures. In one such move, SEBI has increased the application limit for retail investors to Rs 2 lakh, from Rs 1 lakh at present.[9]

[edit]Controversies

Supreme Court of India heard a Public Interest Litigation (PIL) filed by India Rejuvenation Initiative that had challenged the procedure for key appointments adopted by Govt of India. The petition alleged that, "The constitution of the search-cum-selection committee for recommending the name of chairman and every wholetime members of SEBI for appointment has been altered, which directly impacted its balance and could compromise the role of the SEBI as a watchdog." [10][11] On 21 November 2011, the court allowed petitioners to withdraw the petition and file a fresh petition pointing out constitutional issues regarding appointments of regulators and their independence. The Chief Justice of India refused the finance ministrys request to dismiss the PIL and said that the court was well aware of what was going on in SEBI.[10][12] Hearing a similar petition filed by Bangaluru-based advocate Anil Kumar Agarwal, a two judge Supreme Court bench of JusticeSS Nijjar and Justice HL Gokhale issued a notice to the Govt of India, SEBI chief UK Sinha and Omita Paul, Secretary to the President of India.[13][14] Further, it came into light that Dr KM Abraham (the then whole time member of SEBI Board) had written to the Prime Minister about malaise in SEBI. He said, "The regulatory institution is under duress and under severe attack from powerful corporate interests operating concertedly to undermine SEBI". He specifically said that Finance Minister's office, and especially his advisor Omita Paul, were trying to influence many cases before SEBI, including those relating to Sahara Group, Reliance, Bank of Rajasthan and MCX. [15][16]...

SEBI ACT, 1992

he Securities and Exchange Board of India Act, 1992 (the SEBI Act) was amended in the years 1995, 1999 and 2002 to meet the requirements of changing needs of the securities market and responding to the development in the securities market. Based on the Report of Joint Parliamentary Committee (JPC) dated December 2, 2002, the SEBI Act was amended to address certain shortcomings in its provisions. The mission of SEBI is to make India as one of the best securities market of the world and SEBI as one of the most respected regulator in the world. SEBI also endeavors to achieve the standards of IOSCO/FSAP. In this background, the internal group constituted by SEBI consisting of its senior officers had proposed certain amendments to the SEBI Act. The SEBI Board had constituted an Expert Group under the Chairmanship of Mr Justice M. H .Kania (Former Chief Justice of India) to consider the proposals. The report of the Expert Group is placed for eliciting public comments on the recommendations. It may be noted that the Report does not necessarily reflect the views of SEBI on the various proposals and recommendations. SEBI would consider the comments received from various sources before taking any final view on the recommendations.