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Unit 14: Securities and Exchange Board of India

As per Section 11(4) SEBI, may, by an order or for reasons to be recorded in writing, take any Notes
of the following measures either pending investigation or inquiry or on completion of such
investigation or enquiry:
(a) suspend the trading of any security in a recognised stock exchange.

(b) restrain persons from accessing the securities market and prohibit any person associated
with securities market to buy, sell ordeal in securities.

(c) suspend any office-bearer of any stock exchange or self regulatory organisation from
holding such position.
(d) impound and retain the proceeds or securities in respect of any transaction which is under
investigation.

(e) attach for a period not exceeding one month, with prior approval of a magistrate, one
or more bank accounts of any intermediary or any person associated with the securities
market in any of the Act or rules or regulations made there under.

(f) direct any intermediary or any person associated with the securities market in any manner
not to dispose of or alienate an asset forming the past of any transaction which is under
investigation.
Section 11A of SEBI Act provides that SEBI may prohibit, for the protection of the investors, any
company from issuing any offer document including a prospectus or advertisement soliciting
money from the public for the issue of securities, and specify the conditions subject to which such
offer documents can be issued. The Board may specify the matters relating to issue of capital,
transfer of securities and other matters, which shall be disclosed by the companies. It may also
issue a prospectus, any offer document or advertisement, soliciting money from the public for
issue of securities. SEBI may also specify the conditions subject to which the prospectus, such
offer document or advertisement, if not prohibited, may be issued.

Note According to clause (j) of Securities Laws (Amendment) Act, 2004 (w.e.f. 12-10-
2004). “Stock exchange” means—
(a) any body of individuals, whether incorporated or not, constituted before
corporatisation and demutualisation under sections 4A and 4B, or
(b) a body corporate incorporated under the Companies Act, 1956 (1 of 1956) whether
under a scheme of corporatisation and demutualisation or otherwise, for the purpose
of assisting, regulating or controlling the business of buying, selling or dealing in
securities.

14.3 Management of SEBI

The management of SEBI vests in the board, which consists of the following members, namely:

(a) A Chairman

(b) Two members from amongst the officials of the ‘Ministers of the Central Government
dealing with Finance of Law’

(c) One member from amongst the official of the Reserve Bank of India
(d) Two other members, to be appointed by the Central Government

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