Important for GS Prelims- Economy
About SEBI
- It is a statutory regulator of India’s securities market, charged with a mandate: protecting investor interests, promoting market development, and regulating market operations.
- Established as a non-statutory body on April 12, 1988, and granted statutory status on January 30, 1992, through the SEBI Act, 1992,
- Prior to SEBI, the securities market was regulated by the Controller of Capital Issues (CCI) under the Capital Issues (Control) Act, 1947.
Key Facts on SEBI
| Particular | Details |
| Headquarters | Bandra Kurla Complex, Mumbai |
| Regional Offices | New Delhi, Kolkata, Chennai, Ahmedabad |
| Board Strength | 9 members |
| Appellate Body | Securities Appellate Tribunal (SAT), established under Section 15K, SEBI Act, 1992 |
| Second Appeal | Supreme Court of India (restricted to questions of law) |
| Current Chairman | Tuhin Kanta Pandey (took charge March 1, 2025, succeeded Madhabi Puri Buch) |
| SAT Presiding Officer | Justice P.S. Dinesh Kumar |
Organizational Structure
- Board of Directors (9 members): A Chairman (nominated by the Union Government); two government officials from the Finance Ministry and Companies Act administration; one RBI-nominated member; and five other members nominated by the Union Government, of whom at least three must be Whole-Time Members (WTMs).
- Regulates markets through more than 20 specialized departments, including Information Technology, Foreign Portfolio Investors and Custodians, Investment Management, and Investigations.
- Enhanced powers in 2014: authority for search and seizure operations and stricter penalties for market rigging and insider trading.
Powers and Functions
- Drafts rules, regulations, and circulars governing issuers, intermediaries, and investors, including listing obligations, mutual fund operations, algorithmic trading, and insider trading prohibitions.
- Inspects books and records of exchanges, listed companies, and intermediaries; under Section 11C, can appoint an investigating authority and, with judicial authorization, conduct search and seizure.
- Appoints adjudicating officers to impose penalties; under Section 11B, issues remedial directions such as restraining market access or ordering disgorgement of illicit profits.
Conclusion
SEBI evolved from a non-statutory body in 1988 to a fully empowered statutory regulator in 1992 in the aftermath of the Harshad Mehta scam, and today exercises quasi-legislative, quasi-executive, and quasi-judicial powers over India’s securities market, with ongoing reforms spanning legislative consolidation, algorithmic trading safeguards, and ESG disclosure norms.
| This concept has been elaborately discussed in the following article of India’s Gold Exchange: Understanding the EGR Lifecycle |