![]() ![]() The SEBI’s developmental functions include: Developmental functions also involve promoting and developing activities in stock exchange and increase the business in stock exchange. SEBI authorities aim to function in public interest and attempts to make the securities markets accessible to common citizens. ![]() SEBI is one of the few regulatory bodies in India which not only regulates but also innovates. In addition to this, SEBI has also ceased the practice of making preferential allotment of shares unrelated to market prices. ![]() SEBI also has jurisdiction over investigating cases of insider trading and penalises all offenders guilty of committing such activity. Other Protective Functions– In accordance to its commitment to fair practices and code of conduct, SEBI takes certain steps from time to time including the issuance of guidelines to protect the interest of debenture-holders wherein companies cannot change terms in midterm.Spreading Awareness– SEBI regularly undertakes steps to educate investors so that they are able to understand the law and how to transact safely on the securities market.Prohibiting Fraudulent and Unfair Trade Practices- Under SEBI guidelines, companies are not permitted to make any misleading claim or statement which is likely to result in the public buying more securities of the company.Furthermore, the penalties and punishments for committing insider trading have been defined under Chapter IV-A of the SEBI Act. SEBI (Insider Trading) Regulation, 1992 is aimed at laying strict guidelines to curb insider trading practices. In India, SEBI has a strict stance against insider trading. Insider trading is illegal when the material information is still non-public, and this sort of insider trading comes with harsh consequences. Insider trading can be either illegal or legal depending on when the insider makes the trade. War Against Insider Trading– Insider trading is referred to as the practice of trading in a public company’s stock by someone who has non-public, material information about that stock for any reason.Experts are of the opinion that SEBI’s intense surveillance measures and the various circuit filters that it has imposed have curbed price rigging in the cash segment. It is the lowest detection rate since at least 2008. In FY 2019-20, SEBI detected only 35 cases of share price rigging, which basically involves artificial demand, supply trades to move price. SEBI aggressively prohibits such practices because it is fraudulent in nature and investors feel cheated in such practices. Checks and Penalises Price Rigging– The practice of price rigging refers to the manipulation of the prices of securities with the main objective of inflating or depressing the market price of securities.Given below we have elaborated on SEBI’s function under 3 categories: The Securities And Exchange Board of India (SEBI) functioning as a regulator executes a wide variety of vital functions as laid down in the governing statute- SEBI Act of 1992. In addition to this, there are 20 departments working under the SEBI including the departments of corporation finance, economic and policy analysis, debt and hybrid securities, enforcement, human resources, investnment management, commodity derivatives, market regulation, legal affairs, and more. Five other members will be nominated by the Union Government of India. One member will be appointed from the Reserve Bank of India. ![]() Two officers from the Union Finance Ministry will be a part of this structure. The chairman of SEBI is nominated by the Union Government of India. The hierarchical structure of SEBI consists of the following members: In this article, Team YLCC explores the role of SEBI as a regulator of the financial markets in India. It is the highest authority on matters relating to the operation of Security markets, Stock Exchanges, Commodities Markets, etc. It monitors and regulates the securities market and protects the interests of the investors by enforcing certain rules and regulations. The Securities and Exchange Board of India (SEBI) is a statutory regulatory body entrusted with the responsibility to regulate the Indian capital markets. ![]()
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