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Corporate Legal Framework Pretty Bhalla, Lovely Professional University

Notes Unit 14: Securities and Exchange Board of India

CONTENTS

Objectives
Introduction
14.1 Securities and Exchange Board of India (SEBI)
14.2 Powers and Functions of SEBI
14.3 Management of SEBI

14.4 Activities
14.5 Self-regulation
14.6 Regulatory Framework of Security Market
14.7 Regulators

14.8 Regulation of OTCEI
14.9 Regulation of the Investments of a Mutual Fund
14.10 Summary
14.11 Keywords
14.12 Self Assessment

14.13 Review Questions
14.14 Further Readings

Objectives

After studying this unit, you will be able to:

Discuss Securities and Exchange Board of India (SEBI)
Explain powers and functions of SEBI
Describe management of SEBI

Introduction

In last unit, you have studied about industrial laws. This unit provides you brief knowledge
of SEBI. A stable and effi cient financial system provides the foundation for implementation of

effective stabilization policies, more accurate pricing of risk and more efficient use of capital.

Efficiency of the financial system is governed by the role of markets in mobilizing and allocating

financial resources, in providing liquidity and payment services and in gathering information on
which to base investment decisions. Stability, on the other hand, is concerned with safeguarding

the value of liabilities of financial intermediaries that serve as stores of wealth. This also involves

questions relating to prudential supervision, financial regulation and good governance. It needs

to be added here that as financial systems get increasingly globalizes, capital moves not only in
response to competing monetary policies, but also to competing financial systems. Ineffi cient and

unstable financial systems are therefore likely to be increasingly penalized. In India, as in other

parts of the world, securities regulations have evolved in the face of two apparently diverging
trends.
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