Copyright

Securities & Exchange Board of India: Definition & Function Video

An error occurred trying to load this video.

Try refreshing the page, or contact customer support.

Coming up next: Types of Wholesale Intermediaries

You're on a roll. Keep up the good work!

Take Quiz Watch Next Lesson
 Replay
Your next lesson will play in 10 seconds
  • 0:03 SEBI
  • 1:01 Functions
  • 3:03 Lesson Summary
Save Save Save

Want to watch this again later?

Log in or sign up to add this lesson to a Custom Course.

Log in or Sign up

Timeline
Autoplay
Autoplay
Speed Speed

Recommended Lessons and Courses for You

Lesson Transcript
Instructor: Morgan Gannarelli
In this lesson, we'll discuss the functions of the Securities and Exchange Board of India. We'll also outline what the Securities and Exchange Board of India is responsible for.

SEBI

The Securities and Exchange Board of India (SEBI) is similar to the United States Securities and Exchange Commission. They are the governing body for financial regulations in India. The SEBI is responsible for maintaining a stable investment and financial market for India. The board was established in 1988 but not given any regulating abilities until 1992 when the Securities and Exchange Board of India Act passed. The SEBI headquarters are in Mumbai, and the board is headed by eight members.

The SEBI is a corporate structure with five departments that each have a department head. It has two advisory committees that are responsible for primary and secondary markets. These two committees advise the Securities and Exchange Board of India on regulating intermediaries, issuing of securities in the primary market, disclosure requirements of companies, any changes in legal framework, and regulating and developing the secondary stock exchange. While the committees provide advice, they cannot enforce any changes.

Functions

The SEBI utilizes three functions to meet its objectives, protective, developmental, and regulatory. The primary functions have been defined in the SEBI Preamble that states the Securities and Exchange Board of India must 'protect the interest of investors in securities and to promote the development of, and to regulate the securities market and matters connected there with or incidental there to.' Due to malpractice in the stock market, the SEBI was formed to regulate and prevent any further fraudulent activities that are not in the best interest of the investors.

Here are a few examples of some of the SEBI's functions:

  • Regulating the business of stock exchanges and other securities exchange markets
  • Registering and regulating the work of stock brokers and other intermediaries that may have an association with securities markets
  • Prohibiting fraudulent and unfair trade activities within the securities market, and
  • Prohibiting insider trading inside the securities market

To unlock this lesson you must be a Study.com Member.
Create your account

Register to view this lesson

Are you a student or a teacher?

Unlock Your Education

See for yourself why 30 million people use Study.com

Become a Study.com member and start learning now.
Become a Member  Back
What teachers are saying about Study.com
Try it risk-free for 30 days

Earning College Credit

Did you know… We have over 200 college courses that prepare you to earn credit by exam that is accepted by over 1,500 colleges and universities. You can test out of the first two years of college and save thousands off your degree. Anyone can earn credit-by-exam regardless of age or education level.

To learn more, visit our Earning Credit Page

Transferring credit to the school of your choice

Not sure what college you want to attend yet? Study.com has thousands of articles about every imaginable degree, area of study and career path that can help you find the school that's right for you.

Create an account to start this course today
Try it risk-free for 30 days!
Create an account
Support