SEBI stands for “SECURITY AND EXCHANGE BOARD OF INDIA”.The SEBI was established on April 12,1988 through an administrative order,but it became a statuary and really powerful organization only since 1992.The Capital Issue (Control)Act ,1947 was replaced and the SEBI was setup on 21 Feb 1992 through an ordinance issued on 30th Jan 1992.The ordinance was replaced by the SEBI Act on 4 April 1992.Certain power under certain section of Security Contract (Regulation)Act ,1956 and Company Act 1956 have been delegated to SEBI .The regulatory power of it was increased through Security Law (Amendment)Ordinance of Jan 1995 which was subsequently replaced by an Act of Parliament .The SEBI is under overall control of Ministry of Finance , has its head office at Mumbai.It has now become very important organization of financial regulatory framework of India.
The philosophy underlying the creation of the SEBI is that the multiple regulatory bodies for securities industry mean that the regulatory system has gets divided ,causing confusion among market participant as to who is really in command .In multiple regulatory structure ,there is also an overlap of function of different regulatory bodies .
Through the SEBI ,the regulatory model which is sought to be put in place in India is one in which every aspect of securities market regulation is entrusted to a single highly visible and independent organization ,which is backed by a statute , and which is accountable to the Parliament and in which investors have trust.
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6 Comments. Leave new
It is informative but not enough. You could have discussed about the history and reasons why SEBI was formed.
Not satisfactory!
Good one, with easy and simple language.
SEBI also ensures fair dealing of securities and transparency as well as it prohibits insider trading and self regulation. Nice article.
Simple and well explained
good effort!