Objectives of SEBI

The Preamble to the SEBI Act, 1992 itself states SEBI's purpose: "to protect the interests of investors in securities and to promote the development of, and to regulate, the securities market and for matters connected therewith or incidental thereto." From this, SEBI's objectives are usually explained under three heads:

• To protect the interests of investors — particularly small and individual investors, by ensuring they receive accurate, adequate and timely information about securities and are not cheated through fraudulent or unfair practices.
• To regulate the securities market — by framing rules and regulations for the conduct of stock exchanges, brokers, merchant bankers and other intermediaries, so that the market functions in a fair, transparent and orderly manner.
• To promote the development of the securities market — by removing structural deficiencies, encouraging fair competition among intermediaries, professionalising the market's institutions, and adopting flexible, innovation-friendly measures (e.g. permitting new instruments and trading methods) so that the market can grow to meet the needs of a modernising economy. …