Securities and Exchange Board of India (SEBI)

SEBI

Securities and Exchange Board of India (SEBI) is a autonomous body created by the Government of India in 1988 and given statutory form in 1992 with the SEBI Act 1992. Its head office is in Mumbai, and has regional offices in Chennai and Delhi. SEBI is the regulator of Securities markets in India.

The new chairman of SEBI, Mr.U.K.Sinha took charge on 2011

PREAMBLE

The Preamble of the Securities and Exchange Board of India describes the basic functions of the Securities and Exchange Board of India as “…..to protect the interests of investors in securities and to promote the development of, and to regulate the securities market and for matters connected therewith or incidental thereto”

Organization Structure

Mr.U.K.Sinha who is the seventh chairman of the market watchdog had been serving as the chairman of NSDL [National Securities Depository Limited] and had made significant contribution to it by introducing a paperless system for storing securities. The Board comprises whole time members and outside members (representing the finance ministry, RBI and experts). The present whole time members are:

• Dr. TC Nair

Below the Board, the staff/officers of the organization are led by Executive Directors (EDs). The present EDs are Mr. RK Nair, Ms. Usha Narayanan, Mr. Sandeep P Parekh and Mr. P. K. Nagpal. Also, Mr. MS Ray, a senior IRS officer on deputation, is an Officer on Special Duty (equivalent to an ED).

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.

SEBI has had a mixed history in terms of its success as a regulator. It has pushed systemic reforms aggressively and successively (e.g. the quick movement towards making the markets electronic and paperless rolling settlement on T+2 basis). SEBI has been active in setting up the regulations as required under law.