Wednesday, 11 March 2020

The Indian Capital Market Regulator – SEBI


The Indian Capital Market Regulator – SEBI

SEBI, established in 1988 and became a fully autonomous body by the year 1992 with
defined responsibilities to cover both development & regulation of the market.
A Board by the name of the Securities and Exchange Board of India (SEBI) was constituted
under the SEBI Act to amminister its provisions in 1992 with one chairman and five
SEBI has to be responsive to the needs of three groups, which constitute the market, viz.,
the issuers of securities, the investors and the market intermediaries.
SEBI has three functions rolled into one body quasi-legislative, quasi-judicial and quasiexecutive.
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.
Notes A second appeal lies directly to the Supreme Court.
SEBI has enjoyed success as a regulator by pushing systemic reforms aggressively and
SEBI has been active in setting up the regulations as required under law.

Bear: Bear is a seller of securities.
Bull: A bull is a buyer in the stock market.
Insider Trading: Insider trading can be defined as the sale or purchase of securities by persons
who possess price sensitive information about the company.
Stock exchange: An exchange on which shares of stock and common stock equivalents are
bought and sold.
Underwriter: Underwriter makes a commitment to get the underwritten issue subscribed either
by others or by themselves.
Utilitarianism: Ethics concept in which the happiness of the greatest number of people in the
society is considered the greatest good.

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