What is SEBI ?
The securities and exchange board of India is a regulatory body under the administrative domain in the Ministry of Finance. It was established on 12th April1988 as an executive body and was being given the statutory powers on 30 January 1992 through the SEBI Act 1992. Its headquarter is located at Mumbai, Maharashtra with a number of 867+ employers (2020).
What is the basic structure of SEBI ?
It’s basic structure is to protect the investors, promote development of the securities market for regulating it. SEBI is having a corporate structure with it’s several departments and different levels of hierarchical organizations:
- Each department of SEBI is having a head of department who manages all the functioning.
- The head of the departments is being administrated by a hierarchy.
- It is having a sum total of around twenty departments. Some are listed as below:
- Economic and policy analysis
- Debt and hybrid securities.
- Corporation finance
- Human resources
- Enforcement
- Legal affairs
- Commodity derivatives and market regulation
- Investment management
- It consists of a chairperson and several other members working in it.
Functions of SEBI ?
- For protecting the interest of entities SAT (Securities Appellate Tribunal) has been constituted.
- SAT is consisting of a Presiding Officer and two more other members.
- Sometimes for resolving some issues it also appoints some special committees.
- It performs the function of registration and regulation of the venture capital funds and and the collective mutual funds.
- SEBI works for promoting and regulating self regulating organizations.
Major achievements of SEBI
SEBI ensures a well -functioning of securities market in India, along with driving it’s development. Some of it’s major achievements can be listed below:
- Initiating nationwide electronic trading
- Establishing clearing corporations
- Nurturing the mutual fund industry
- Introducing risk management system
- Demilitarization of shares
- Shortening settlement cycles
Powers of SEBI
SEBI is having several powers including as mentioned below:
- It is having a Quasi legislative for making the rules and regulations and the circulars for regulating the various aspects of the securities market.
- SEBI passes all the orders and ruling under Quasi-Judicial.
- It also conducts enforcement actions and investigations under Quasi Executive.
- SEBI has the power to prohibit the insider trading, in case if found.
- It also regulates the securities markets and stock exchanges in business.
- It may order an investigation order if it is having reasonable grounds for it.
- SEBI regulates the levies fees, investment schemes and notifies rules and regulations also.
Issues associate with SEBI
It is having a lesser emphasis on prudential regulation and excessive control on regulation of the market conduct.
The fear of regulation is widespread as the component of prior consultation with the market and a system of review of regulations to see of they had met the articulated purpose which is substantially missing.
The rules and enforcement are sometimes inadequate specially in the areas of insider trading.
Comparing to its counterparts in the UK and US it gives much greater legislative as well as enforcement powers.
Way Forward
There is a need of change in attitude of SEBI in order to shift the current focus from the regulation of the market conduct to the prudential regulations.
In lieu of just using the volume of the funds being raised as a parameter of growth and success SEBI needs to do deep review and research as to what can be done more better.
Lateral entry can be done to draw the best talent for strengthening it’s human resources.
For removing the excluded and overlap boundaries a unified financial regulator may resolve the issue.
