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The functions of it can be distributed into Regulatory,Protective and Development functions.
- It regulate depositors and participants, debenture trustees ,FIIs, merchant bankers, portfolio managers and investment advisers,stock brokers,underwriters, registrar to issue shares and share transfer agents etc.
- It register and regulate the working of mutual funds,venture capital funds.
- It conducts Inquiries and audit of stock exchanges.
- It regulate takeovers of companies.
- It checks price rigging which refers to manipulating the price of securities with main objective of inflating and depressing the market price of securities . This practices can defraud and cheat the investors .
- It prohibit insider trading.It means they prevent trading by important person of a company such as director ,promoter ,adviser as they have important information from inside which investors and security buyers don’t have . so they can be cheated by them and loose the opportunity of getting profits etc.
- SEBI can issue guidelines in respect of information disclosure, operational transparency ,and investors protection,preferential issues,financial instruments ,pricing of issue,transfer of shares among the promoters.
- It undertakes steps to educate the investors so they are able to evaluate securities of different companies and select most profitable securities.
- It promote the training of intermediaries of security market.
- It has permitted the internet trading though registered stock brokers.
- It has underwriting optional to reduce the cost of issue.
- Even IPO of primary market is permitted through stock exchange.
Lets talk about the power of SEBI little
- It is empowered to register any agency or intermediaries who may be associated with the securities market and none of them shall buy,sell or deal in securities except under and in accordance with the condition of certification of registration issued by the SEBI.
- It can direct stocks exchanges to amend their by laws and rules including reconstitution of governing board /council .
- It is empowered to license the security dealers operating outside the jurisdiction .
- The SEBI has been empowered to notify its regulations and file complaints in court without prior knowledge of GOI.
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11 Comments. Leave new
Well explained article! 🙂
Informative article.
Great work
SEBI has initiated fairness in the trading of securities and also provide an independent decision about various securities to the investors. well written.
well explained
this article shows how SEBI plays an important role.
Nicely presented. Well done. I think powers of SEBI needs to be expanded.
Good effort
Nice effort. You have explained it very well
Short and sweet. Well explained.
Nice explanation