Securities and Exchange Board of India (SEBI)

The Securities and Exchange Board of India (SEBI) is the primary regulator of India’s securities markets. Its stated objectives are to protect the interests of investors, to promote the development of the securities market, and to regulate the market and related activities.

Key roles and powers

• Regulator: drafts rules and regulations governing securities issuance, trading, and market intermediaries.
• Adjudicator: issues rulings and orders in disputes and regulatory matters.
• Investigator and enforcer: conducts investigations into market misconduct and imposes penalties, including fines and suspensions.
• Market stability: designs and implements measures to maintain market integrity and stability (for example, temporary bans or trading restrictions).

SEBI has used these powers proactively at times—for example, imposing a ban on short selling between 2001 and 2008.

History and presence

• SEBI in its present form was established by parliamentary legislation in January 1992.
• It replaced earlier regulatory frameworks that dated back to the Capital Issues (Control) Act of 1947.
• Headquarters: Bandra-Kurla Complex, Mumbai.
• Regional and local offices: New Delhi, Kolkata, Chennai, Ahmedabad, and numerous local offices across major Indian cities.

Charter and mandate

SEBI’s oversight covers three principal groups:
* Issuers of securities (companies issuing stocks, bonds, etc.).
Investors (retail and institutional).
Market intermediaries (brokers, merchant bankers, depositories, rating agencies, etc.).

Its functions span rulemaking, dispute resolution, investigation, and enforcement to ensure fair, transparent, and efficient securities markets.

Organization

SEBI is governed by a board of directors that includes:
* A chairperson.
Representatives from the Ministry of Finance.
A nominee from the Reserve Bank of India.
* Other appointed members.

(Composition and appointment mechanisms are established by statute and parliamentary provisions.)

Criticisms and checks on power

Critics point to concerns about transparency and limited direct public accountability given SEBI’s broad powers. Institutional checks include judicial review by the Securities Appellate Tribunal and the Supreme Court of India, both of which have on occasion censured SEBI actions.

In response to systemic risks, SEBI also contributed to broader financial-stability efforts, including the establishment of a Financial Stability Board structure in 2009.

Key takeaways

• SEBI is India’s chief securities market regulator, responsible for investor protection, market development, and regulation.
• It combines regulatory, judicial, investigative, and enforcement functions.
• SEBI has a national presence with headquarters in Mumbai and multiple regional/local offices.
• While powerful and proactive, SEBI faces criticism over transparency and accountability, with judicial bodies serving as external checks.