1. Protection Of Investor's Interest :-
SEBI frames rules and regulations to
protect the interest of investors.
It monitors whether the rules and
regulations are being followed by the concerned parties i.e., issuing companies,
mutual funds, brokers and others. It handles investor grievances or complaints
against brokers, securities issuing companies and others.
2. Restriction On Insider Trading :-
SEBI restricts insider trading
activity. It prohibits dealing, communication or counselling on matters
relating to insider trading. SEBI’s regulation states that no insider
(connected with the company) shall - either on his own behalf or on behalf of
any other person, deal in securities of a company listed on any stock exchange
on the basis of any unpublished price sensitive information.
3. Regulates Stock Brokers Activities
:-
SEBI has also laid down regulations in
respect of brokers and sub-broker. No brokers or sub-broker can buy, sell or
deal in securities without being a registered member of SEBI. It has also made
compulsory for brokers to maintain separate accounts for their clients and for
themselves. They must also have their books audited and audit reports filed
with SEBI.
4. Regulates Merchant Banking :-
SEBI has laid down regulations in
respect of merchant banking activities in India. The regulations are in respect
of registration, code of conduct to be followed, submission of half-yearly
results and so on
5. Dematerialisation Of Shares :-
Demat of shares has been introduced in
all the shares traded on secondary stock markets as well as those issued to
public in prirriary markets. Even bonds and debentures are allowed in demat
form.
6. Guidelines On Capital Issues :-
SEBI has framed necessary guidelines in
connection with capital issues. The guidelines are applicable to :- First
Public Issue of New Companies, First Public Issue by Existing Private / Closely
held Companies, Public Issue by Existing Listed Companies.
7. Regulates Working Of Mutual Funds :-
SEBI regulates the working of mutual
funds. SEBI has laid down rules and regulations that are to be followed by
mutual funds. SEBI may cancel the registration of a mutual fund, if it fails to
comply with the regulations.
8. Monitoring Of Stock Exchanges:-
To improve the working of stock
markets, SEBI plays an important role in monitoring stock exchanges. Every
recognised stock exchange has to furnish to SEBI annually with a report about
its activities during the previous year.
9. Secondary Market Policy :-
SEBI is responsible for all policy and
regulatory issues for secondary market and new investments products. It is
responsible for registration and monitoring of members of stock exchanges,
administration of some of stock exchanges and monitoring of price movements and
insider trading.
10. Investors Grievances Redressal :-
SEBI has introduced an automated
complaints handling system to deal with investor complaints. It assist
investors who want to make complaints to SEBI against listed companies.
11.
Institutional Investment Policy :-
SEBI looks after institutional
investment policy with respect to domestic mutual funds and Foreign
Institutional Investors (FIIs). It also looks after registration, regulation
and monitoring of FIls and domestic mutual funds.
12. Takeovers
And Mergers :-
To protect the interest of investors
in case of takeovers and mergers SEBI has issued a set of guidelines. These
guidelines are to be followed by corporations at the time of takeovers and
mergers.
13. Reforms In Capital Market :-
SEBI has introduced many reforms in
Capital Market. Some of them are :-
a) Demat of shares
b) PAN made compulsory.
c) Buy back of shares allowed.
d) Corporate Governance introduced
e) Transparency rules in Brokers Transactions.
14. Other Functions :-
a) It promotes investor’s education, and also training of
intermediaries in securities market.
b) It performs functions and exercise powers under provisions
of Capital Issues (Control) Act 1947, Securities Contracts Act 1956 etc.
c) It promotes and regulates self-regulatory organisations.
d) It prohibits fraudulent and unfair trade practices in
securities Market
e) It promotes investors education and training in securities
market.
APPRAISAL OF SEBI'S WORK
1)
Large Number Of Rules
:-
There are large .number of rules
prescribed by SEBI. These have also been changing from time to time. This has
created a high level of uncertainty and confusion. It is very difficult to
determine what rules are currently in operation.
2)
Less Protection To
Small Investors
:-
SEBI is not really serious about
reforming the system and protecting the individual and small investors. It has
failed to penalise the people responsible for causing abnormal price
fluctuations on stock market.
3)
False Claim On High
Success Rate :-
SEBI’s Annual Report, in 1995-96
claims, a very high success rale in resolving investor complaints. But in
reality it is not so.
4)
Insufficient Power :-
SEBI has
often complained of having insufficient authority and power. It should become
more effective, efficient, socially-accountable and small - investor -
friendly.
working is
quite good. Liquidity in market has improved various segments have also become
interlinked. It provides a world class trading and’ settlement system.
5) Corporate – Friendly regulation :-
The
regulatory ineffectiveness of SEBI in certain areas has been due to its
concentration on symptoms rather than the root causes.
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