SEBI – Origin, Establishment and Objectives

Before SEBI, new share issues in India were regulated by the Controller of Capital Issues (CCI) under the Capital Issues (Control) Act, 1947 — a system that controlled the price and timing of issues but did little to protect investors from malpractices such as unofficial premiums, delayed allotments, rigged prices and misleading prospectuses.

To address this gap, the Securities and Exchange Board of India (SEBI) was first set up in 1988 as a non-statutory body by a resolution of the Government of India. It was given full statutory powers in 1992 under the SEBI Act, 1992, and the Capital Issues (Control) Act was repealed the same year. SEBI is headquartered in Mumbai, with regional offices at New Delhi, Kolkata, Chennai and Ahmedabad, and is managed by a Board consisting of a Chairman and members nominated by the Central Government, the Reserve Bank of India and the Ministry of Finance.

Objectives of SEBI

• To protect the interests of investors in securities, so that savings channelled into the market are not exposed to fraud.
• To regulate the securities market, so that stock exchanges and intermediaries function in an orderly and fair manner.
• To promote the development of the securities market by widening the base of investors and issuers.
• To prevent malpractices such as price rigging, insider trading and unfair trade practices. …