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Introduction
It is the regulatory body for securities and
commodity market in India under the own
ership of Ministry of Finance within the Go
vernment of India.
It was established on 12th April, 1992.
It was introduced to promote transparenc
y in the Indian Investment Market. It is ent
rusted with the task of regulate the functio
ning of the Indian Capital Market.
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Sebi was founded by Surendra Dave and a small team from
IDBI in 1988. This team drafted the Sebi Act and designed an
organization. This team drafted the Sebi Act and designed an
organization.
The Harshad Mehta 1992 Scam
Led to the transformation of Controller of
Capital Issues to SEBI On 12th April 1988
History
It was officially established by The Government of India in the year 1988 an
d given statutory powers in 1992 with SEBI Act 1992 being passed by the In
dian Parliament.
In April, 1988 the SEBI was constituted as the regulator of capital markets i
n India under a resolution of the Government of India.
However, in the year of 1995, the SEBI was given additional statutory powe
r by the Government of India through an amendment to the Securities and E
xchange Board of India Act, 1992.
SEBI has its Headquarters at the business district of Bandra Kurla Complex i
n Mumbai, and has Northern, Eastern, Southern and Western Regional Offic
es in New Delhi, Kolkata, Chennai and Ahmedabad respectively.
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• Commodity Derivatives Market Regulation
Department.
• Corporation Finance Department (CFD)
• Department of Economic and Policy Analysis
(DEPA)
Other Major Departments of SEBI
Information Integrated Investment Legal Market International
technology surveillance Management Affairs Intermediaries Affairs
Regulation &
Supervision
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Regulation Of the Prevention Of
Activities of Stock Fraudulent and
Market. Malpractices.
Protection Of the Regulation &
Rights of Investors & Development of Code
Ensuring Safety of Of Conduct For
Their Investment. Intermediaries.
Role of SEBI
Acts As A Watchdog In Order To Regulate The Securities Market And
Protect -
Security Issuers Investors Bank
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Structure
The Board of SEBI comprises of nine members. The Board
is an aggregate of the following:
One Chairman of the board – appointed by the Central G
overnment of India
One Board member – appointed by the Central Bank, tha
t is, the RBI
Two Board members – hailing from the Union Ministry
of Finance
Five Board members – elected by the Central Governme
nt of India
Objectives
To protect the interests of investors in securities.
To monitor the activities of the stock exchange.
To curb fraudulent practices by maintaining a balance betw
een statutory regulations and self-regulation.
To define the code of conduct for the brokers, underwriter
s, and other intermediaries.
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Purpose
SEBI was established to keep a check on unfair and malp
ractices and protect the investors from such malpractice
s. The organization was created to meet the requiremen
ts of the following three groups:
Issuers: SEBI works toward providing a marketplace to t
he investors where they can efficiently and fairly raise th
eir funds.
Intermediaries: SEBI works towards providing a profess
ional and competitive market to the intermediaries
Investors: SEBI protects and supplies accurate informati
on to investors.
Functions
Protective Regulatory Development
Function Function Function
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It checks price manipulation.
It bans Insider trading.
It prohibits unfair and fraudulent trade
practices.
Protective Function
It promotes a fair code of conduct in the
security market.
It takes efforts to educate the investors
regarding ways to evaluate the
investment options better.
It has designed a code of conduct, rules, and
regulations to regulate the brokers, underwriters, and
other intermediaries.
It also governs a company’s takeover.
It regulates and registers the workings of share
transfer agents, stockbrokers, merchant bankers,
Regulatory Function trustees, and others who are linked with the stock
exchange.
It regulates and registers the mutual funds as well.
It conducts audits and inquiries of stock exchanges.
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It facilitates the training of the
intermediaries.
It aims at promoting activities
Development of the stock exchange by
Function having an adoptable
and flexible approach.
It makes underwriting an
optional system in order to
reduce the cost of issue.
Conclusion
It is the apex regulatory body for the securities ma
rket in India.
It sets standards in which the securities market m
ust operate, protecting the rights of issuers and inv
estors.
It has the power to investigate circumstances wher
e market or its players have been harmed and can
enforce govern standards with directives.