SEBI Act, 1992

Overview of SEBI Act, 1992

1. Short Title and Commencement:

   • The Act is called the Securities and Exchange Board of India Act, 1992.
   • It came into effect on January 30, 1992.

2. Objectives:

   • To protect the interests of investors in securities.
   • To promote the development of, and to regulate, the securities market.
   • To regulate the securities market and ensure its orderly functioning.

3. Establishment of SEBI:

   • The Act provides for the establishment of the Securities and Exchange Board of India (SEBI) as a statutory body.

4. Powers of SEBI:

   • Regulatory Authority: SEBI has the power to regulate stock exchanges, intermediaries, and securities markets.
   • Investor Protection: It can take measures to protect the interests of investors.
   • Inspection and Investigation: SEBI has the authority to conduct inspections, investigations, and inquiries.

5. Functions of SEBI:

   • Registration of Intermediaries: SEBI registers and regulates various intermediaries like brokers, sub-brokers, and mutual funds.
   • Market Development: It promotes the development of the securities market.
   • Regulation of Stock Exchanges: SEBI oversees the functioning of stock exchanges and ensures their orderly functioning.
   • Prohibition of Insider Trading: The Act empowers SEBI to prohibit insider trading and unfair trade practices.

6. Composition:

   • SEBI consists of a Chairman and other members appointed by the Central Government.

7. Advisory Committees:

   • SEBI can constitute advisory committees to advise on matters relating to the securities market.

8. Penalties and Enforcement:

   • The Act provides for penalties for non-compliance with its provisions.
   • SEBI can impose fines and take legal action against violators.

9. Appeal:

   • Any person aggrieved by the orders of SEBI can appeal to the Securities Appellate Tribunal.

10. Miscellaneous Provisions:

    • The Act also contains provisions regarding the appointment of officers, delegation of powers, and rules and regulations made by SEBI.

Important Amendments

Over the years, the SEBI Act has been amended multiple times to address the changing dynamics of the securities market and enhance the regulatory framework.