1) Introduction -
The Securities and Exchange Board of India (SEBI) was established in 1988 to promote healthy growth of the securities market and the Investor's Protection.
Chapter 4, Section 11 of the SEBI Act provides power and functions of the board. Section 11(2) of the SEBI Act, speaks about the functions of SEBI and section 11(3) of the said Act confers power to the Securities and Exchange Board of India.
2) Establishment of the Securities and Exchange Board of India (SEBI) (Section 3) -
According to Section 3(3) of the SEBI Act, the head office of the Board shall be at Bombay. Section 3 (4) the Board may establish offices at other places in India.
(Read in detail >> Establishment of the Securities and Exchange Board of India (SEBI)
Powers and functions of SEBI -
In accordance with the provisions laid down in Section 11(2), the SEBI(Securities and Exchange Board of India) has to perform the following function -
Functions of SEBI -
(1) Subject to the provisions of this Act, it shall be the duty of the Board to protect the interests of investors in securities and to promote the development of, and to regulate the securities market, by such measures as it thinks fit.
(2) Without prejudice to the generality of the foregoing provisions, the measures referred to therein may provide for-
(a) Regulating the business in Stock exchange and any other securities markets;
(b) Registering and regulating the working of stock brokers, sub-brokers, share transfer agents, bankers to an issue, trustees of trust deeds, registrars to an issue, merchant bankers, underwriters, portfolio managers, investment advisers and such other intermediaries who may be associated with securities markets in any manner;
(ba) Registering and regulating the working of the depositories, participants custodians of securities, foreign institutional investors, credit rating agencies and such other intermediaries as the Board may, by notification, specify in this behalf;
(c) Registering and regulating the working of venture capital funds and collective investment schemes, including mutual funds;
(d) Promoting and regulating self-regulatory organizations;
(e) Prohibiting fraudulent and unfair trade practices relating to securities markets;
(f) Promoting investors’ education and training of intermediaries of securities markets;
(g) Prohibiting insider trading in securities;
(h) Regulating substantial acquisition of shares and take-over of companies;
(i) Calling for information from, undertaking inspection, conducting inquiries and audits of the stock exchange, mutual funds, other persons associated with the securities market. intermediaries and self-regulatory organizations in the securities market;
(ia) Calling for information and record from any bank or any other persons authority or board or corporation established or constituted by or under any Central, State or Provincial Act in respect of any transaction in securities which are under investigation or inquiry by the Board;
(j) Performing such functions and exercising such powers under the provision of the Securities Contracts (Regulation) Act, 1956, (42 of 1956) as may be delegated to it by the Central Government;
(k) Levying fees or other charges for carrying out the purposes of this section;
(l) Conducting research for the above purposes;
(la) Calling from or furnishing to any such agencies, as may be specified by the Board, such information as may be considered necessary by it for the efficient discharge of its functions;
(m) Performing such other function as may be prescribed.
(2A) Without prejudice to the provisions contained in sub-section (2), the Board may take measures to undertake inspection of any book, or register, or other document or record of any listed public company or a public company (not being intermediaries referred to in section 12) which intends to get its securities listed on any recognised stock exchange where the Board has reasonable grounds to believe that such company has been indulging in insider trading or fraudulent and unfair trade practices relating to securities market.
Powers of SEBI -
(3) Notwithstanding anything contained in any other law for the time being in force while exercising the powers under clause (i) or clause (ia) of sub-section (2) or sub-section (2A), the Board shall have the same powers as are vested in a civil court under the Code of Civil Procedure, 1908 (5 of 1908) while trying a suit, in respect of the following matters, namely —
(i) The discovery and production of books of account and other documents, at such place and such time as may be specified by the Board;
(ii) Summoning and enforcing the attendance of persons and examining them on oath;
(iii) Inspection of any books, registers and other documents of any person 3 referred to in section 12, at any place.
(iv) Inspection of any book, or register or other document or record of the 4; company referred to in sub-section (2A);
(v) Issuing commissions for the examination of witnesses or documents.