SEBI Full Form: The Securities and Exchange Board of India (SEBI) is India’s securities and commodity market regulator, reporting to the Ministry of Finance of the Indian government.
The SEBI Act of 1992 was formed on April 12, 1992, and gave it Statutory Powers on January 30, 1992.
The Securities and Exchange Board of India (SEBI) was founded in 1988 as a non-statutory regulatory agency for the securities industry.
With the passage of the SEBI Act 1992 by the Indian Parliament, it became an autonomous organization with statutory powers on January 30, 1992.
What is SEBI and SEBI full form
SEBI is headquartered in Mumbai’s Bandra Kurla Complex commercial district, with regional offices in New Delhi, Kolkata, Chennai, and Ahmedabad.
In the financial year 2013–2014, it opened offices in Jaipur and Bangalore and Guwahati, Bhubaneshwar, Patna, Kochi, and Chandigarh.
Before SEBI, the regulating authority was the Controller of Capital Issues, which had authority under the Capital Issues (Control) Act of 1947.
SEBI is run by its members, who include the following individuals:
• The chairman is appointed by the Indian Union Government.
• Two officers from the Union Finance Ministry, i.e., two members.
• One member from India’s Reserve Bank.
• The Union Government of India nominates the remaining five members, at least three of whom must be full-time members.
Except for this, chit funds, and cooperatives, collective investment plans were brought in under SEBI with an amendment of 1999.
Structure of the company
On February 10, 2017, Ajay Tyagi was appointed chairman, succeeding U K Sinha, and took office on March 1, 2017. His position as chairman of SEBI was extended for another six months in February 2020.
The following are the members of the board:
Responsibilities and functions
The primary functions of the Securities and Exchange Board of India are described in the Preamble as “…to protect the interests of investors in securities, to encourage the development of, and to regulate the securities market, and for issues connected with or incidental thereto.”
SEBI must respond to the demands of three segments that make up the market:
- Security issuers
- Middlemen in the market
SEBI combines quasi-legislative, quasi-judicial, and quasi-executive authorities into one body. In its legislative role, it writes regulations; in its executive role.
it conducts investigations and enforcement actions; and in its judicial role, it issues findings and orders. Although this gives it a lot of authority, there is an appeals mechanism in place to ensure accountability.
A three-member Securities Appellate Tribunal, led by Justice Tarun Agarwala, former Chief Justice of the Meghalaya High Court, is currently in charge.
A second appeal can be made to the Supreme Court immediately. SEBI has adopted a proactive approach to aligning disclosure rules with international best practices.
EBI has been given the following authority in order to carry out its functions effectively:
- To approve securities exchange bylaws.
- To compel the Securities Exchange to modify its bylaws.
- Examine the books of accounts and request periodic returns from reputable stock exchanges.
- Examine financial intermediaries’ books of accounts.
- Require select businesses to list their stock on one or more stock exchanges.
- Brokers and sub-brokers must be registered.
SEBI committees are made up of people who work for the Securities and Exchange Commission:
- Technical Advisory Group
- Structure Review Committee for Infrastructure Institutions
- SEBI Investor Protection and Education Fund Advisory Committee
- Advisory Committee on Takeover Regulations
- Advisory Committee for the Primary Market (PMAC)
- Advisory Committee on Secondary Markets (SMAC)
- Advisory Committee for Mutual Funds
- Advisory Committee on Corporate Bonds and Securitization
Brokers are divided into two categories:
- Low-cost brokers
- Agents for merchants
Malpractices in the security market must be eliminated.
SEBI has been a successful regulator because it has pushed for systematic reforms systematically and orderly.
SEBI is praised for moving quickly to make markets electronic and paperless by implementing the T+5 rolling cycle in July 2001, T+3 in April 2002, and T+2 in April 2003.
The T+2 rolling cycle means that the settlement takes place two days after the trade date.
SEBI has been quite active in establishing the regulations that are necessary by law.
Bypassing the Depositories Act, 1996, SEBI eliminated physical certificates that were vulnerable to mail delays, theft, and fraud, making the settlement process lengthy and inefficient.
In the wake of the global financial crisis and the Satyam debacle, SEBI has been essential in taking swift and effective action.
[requires citation] It expanded the scope and quantity of disclosures required of Indian business promoters in October 2011.
The aftermath of the global financial crisis liberalized the takeover law to make investments easier by reducing regulatory barriers. SEBI has upped the application limit for retail investors from 100,000 to 200,000 in one such step.
The Supreme Court of India heard a Public Interest Litigation (PIL) submitted by the India Rejuvenation Initiative, which questioned the government of India’s procedure for critical appointments.
The constitution of the search-cum-selection committee for suggesting the name of the chairman and all full-time members of SEBI for an appointment has been amended, the petition claimed, “which directly influenced its balance and could impair the SEBI’s role as a watchdog.”
On November 21, 2011, the court authorized petitioners to withdraw their petition and file a new one, citing constitutional concerns over regulator selections and independence.
The Chief Justice of India turned down the finance ministry’s motion to dismiss the PIL, stating that the court was well aware of the situation at SEBI.
A two-judge Supreme Court panel comprising Justice Surinder Singh Nijjar and Justice HL Gokhale issued a notice to the Government of India, SEBI chairman UK Sinha, and Omita Paul, Secretary to the President of India, after hearing a similar case brought by Bengaluru-based lawyer Anil Kumar Agarwal.
Furthermore, it was revealed that Dr. K. M. Abraham (at the time, a full-time member of the SEBI Board) had written to the Prime Minister regarding the agency’s dysfunction.
The regulatory institution is under strain and serious attack by big corporate interests working together to weaken SEBI,” he said. He said that the Finance Minister’s office, particularly his advisor Omita Paul, was attempting to sway various SEBI cases, including those involving Sahara Group, Reliance, Bank of Rajasthan, and MCX.
Regional Securities Exchange and SEBI full form
SEBI full form (Securities and Exchange Board of India) has issued exit – instructions for securities exchanges in a circular dated May 30, 2012. This was mostly owing to the illiquid characteristics of many of the 20+ regional securities markets.
Many of these exchanges were asked to either meet the required criteria or gracefully quit. SEBI’s new rules for securities exchanges stipulate that they must have a minimum net worth of Rs. 1 billion and Rs.
10 billion in yearly trade. The Indian Securities and Exchange Board (SEBI Full Form: Securities and Exchange Board of India) gave recognized securities exchanges two years to comply or depart the market.
De-recognition and exit procedure
Here are some extracts from the Circular:
1. Exchanges may attempt to leave by voluntarily relinquishing recognition.
2. Securities with an annual trading turnover of less than Rs 10 billion on their platform can apply to SEBI for voluntary surrender of recognition and departure at any time before the two years after the date of issuance of this Circular expires.
3. If a Securities exchange fails to achieve the prescribed turnover of Rs 10 billion continuously or does not apply for voluntary surrender of recognition and exit within two years of the date of this Circular, SEBI may proceed with compulsory de-recognition and exit of such Securities Exchange, subject to SEBI’s discretion.
4. Securities exchanges that have already been de-recognized as of the date of this Circular must apply for exit within two months of the date of this circular. If it fails to do so, the de-recognized exchange will be forced to depart the market.
Departments of the SEBI
Through its 20 sections, SEBI oversees the Indian financial market.
- Department of Commodity Derivatives Market Regulation (CDMRD)
- Finance Department of the Corporation (CFD)
- Economic and Policy Analysis Department (DEPA)
- Debt and Hybrid Securities Department (DDHS)
- Department of Law Enforcement – 1 (EFD1)
- Department of Law Enforcement – 2 (EFD2)
- Department of Inquiries and Adjudication (EAD)
- Department of General Services (GSD)
- Department of Human Resources (HRDM)
- Department of Information Technology (ITD)
- Department of Integrated Surveillance (ISD)
- Department of Investigations (IVD)
- Department of Investment Management (IMD)
- Department of Legal Affairs (LAD)
- Department of Market Intermediaries Regulation and Supervision (MIRSD)
- Department of Market Regulation (MRD)
- International Affairs Office (OIA)
- Investor Assistance and Education Office (OIAE)
- Chairman’s Office (OCH)
- Offices in the region (ROs)