SECURITIES EXCHANGE BOARD OF INDIA (SEBI)

SEBI was set up in 1988 to watch over the working and functions of the securities market. It is known to promote a systematic and healthy development in the market. Later, in May 1992, SEBI was granted a legal status as a separate entity. SEBI was established with a sole purpose of preventing any malpractices that happen in the securities market due to its rapid growth. SEBI had the primary job to avoid any breaking of rules and make sure the customers are satisfied with the securities market and are not being violated. The SEBI has the following functions:

1. IT CHECKS PRICE RIGGING: SEBI manipulates the prices of the securities. The securities’ prices are fluctuated to control inflation and deflation in the country. This is done to prevent cheating and fraudulent activities of customers.

2. IT PROHIBITS INSIDER TRADING: If an insider/ any person connected with the company (directors, promoters, etc) use the privileged information that only they have to gain profits in the securities market, it is known as insider trading. SEBI sees to it that no one is able to use their information to gain unfair profits and every customer is at an equal advantage and gains profits in a fair way.

3. DEVELOPMENTAL FUNCTIONS: SEBI helps in the training of the securities market’s intermediaries, it has expanded the reach of securities trading by permitting trading through internet by registered brokers, the underwriting of an issue has been made optional to reduce its cost and it has also allowed companies to make its initial public offer through stock exchanges.

4. REGULATORY FUNCTIONS: SEBI has created a set of rules and regulations for every intermediary related to it. these rules and regulations need to be followed religiously by everyone. Every broker, merchant, stockbroker, trustees, etc need to be registered with the SEBI to be able to practice their duties and work in the securities market. it enquires the audits of the stock exchanges registered with it. It also supervises the takeovers and mergers of companies.