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Securities & Exchange Board of India (SEBI)

FUNCTIONS OF SEBI

The functions of SEBI may be categorized into three parts :-

  • Protective functions

  • Regulatory functions

  • Development functions


Now we shall discuss these functions separately


Protective functions:-  

  1. Safeguarding investors: - SEBI issues press notes in the papers and brings out booklets for educating investors about various practices being followed by stock exchange.

  2. Enforcing code of conduct: - SEBI prescribed code of conduct to be followed in the market. The code helps in conducting the business in good manners.

  3. Control on price: - price is the serious issue which harms the interest of investors. Artificial inflation of prices attains more interest. The prices are then brought down by spreading some rumors about the company generally common investors sell shares at high rate.


Regulative functions

  1. Monitoring stock exchange: - SEBI regulates the working of stock exchange including NSE and OCTCEI. Stock exchanges are required to submit regular returns SEBI showing the compliance of various orders.

  2. Regulating intermediaries: - In order to regulate the working of intermediaries like brokers, underwriters etc SEBI has devised rules and regulations. SEBI also prepare a code of conduct to them.

  3. Regulating mutual funds: - All mutual funds are registered with SEBI. They are required to furnish information about their business and working as required by SEBI.

  4. Adjudication process: - SEBI resolve various matters requiring classification or additional information. A person not satisfied has option for going for appeal an applet tribunal.


Development functions

  1. Registration: SEBI has made it compulsory the registration of members of stock exchange, intermediaries, merchant, banks etc. this step has helped in bringing transparency in the working of these persons and investors’ confidence has grown their actions.

  2. Personal research: - SEBI is increasing research for development of companies and capital market. Such stock exchanges strengthen capital market etc.

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