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Seminar Functions of SEBI: Indian Financial Market

SEBI has three main functions: protective, regulatory, and developmental. The protective function involves prohibiting insider trading and price rigging to protect investors. The regulatory function establishes rules and regulations for companies and financial intermediaries. The developmental function provides education to investors and intermediaries and works to develop the securities market through electronic trading and research.

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SONU GEORGE
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177 views7 pages

Seminar Functions of SEBI: Indian Financial Market

SEBI has three main functions: protective, regulatory, and developmental. The protective function involves prohibiting insider trading and price rigging to protect investors. The regulatory function establishes rules and regulations for companies and financial intermediaries. The developmental function provides education to investors and intermediaries and works to develop the securities market through electronic trading and research.

Uploaded by

SONU GEORGE
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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SEMINAR

Functions of SEBI
Indian Financial Market

Sonu George Mathew


B.Com – C
Grace International
Academy
Functions of SEBI
SEBI has following functions :

1. Protective Function
2. Regulatory Function
3. Development Function
Protective Function
Protective Function: The protective function implies
the role that SEBI plays in protecting the investor
interest and also that of other financial participants. The
protective function includes the following activities.

 Prohibits insider trading: Insider trading is the act of


buying or selling of the securities by the insiders of a
company, which includes the directors, employees and
promoters. To prevent such trading SEBI has barred the
companies to purchase their own shares from the secondary
market.
Check price rigging: Price rigging is the act of causing
unnatural fluctuations in the price of securities by either
increasing or decreasing the market price of the stocks
that leads to unexpected losses for the investors. SEBI
maintains strict watch in order to prevent such
malpractices.

Promoting fair practices: SEBI promotes fair trade


practice and works towards prohibiting fraudulent
activities related to trading of securities.

Financial education provider: SEBI educates the


investors by conducting online and offline sessions that
provide information related to market insights and also
on money management.
Regulatory Function
Regulatory Function: Regulatory functions involve
establishment of rules and regulations for the financial
intermediaries along with corporate that helps in efficient
management of the market. The following are some of the
regulatory functions.

SEBI has defined the rules and regulations and formed


guidelines and code of conduct that should be followed by
the corporate as well as the financial intermediaries.
Regulating the process of taking over of a company.
Conducting inquiries and audit of stock exchanges.
Regulates the working of stock brokers, merchant brokers.
Developmental Function
Developmental function refers to the steps taken by SEBI
in order to provide the investors with a knowledge of the
trading and market function. Activities included are :

 Training of intermediaries who are a part of the security


market.
 Introduction of trading through electronic means or through
the internet by the help of registered stock brokers.
 By making the underwriting an optional system in order to
reduce cost of issue.
 Conducting Research.
 Promotes fair trading.
 Promoting Investors education.
THANK YOU

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