Meaning: -Stock exchange is
a specific place where trading of the securities is arranged in an organised
method. In simple words it is a place where shares, debentures and bonds
(securities) are purchased and sold. The term securities include equity shares,
preference shares, debentures, government bonds, etc. including mutual funds.
The government of India
established the market watchdog i.e. Securities Exchange Board of India (SEBI)
IN April 1988.
SEBI as securities Exchange
Board of India became a statutory body under SEBI Act, 1992, and its Head
Office located in Mumbai. At present SEBI have offices in Mumbai, Calcutta, New
Delhi and Chennai. SEBI consists of the following members.
a.
A Chairman
b.
Two members from the Ministries of the Central
Government. Dealing with Finance and Law
c.
Two other members to be appointed by the Central Government.
In order to regulate and promote capital market, SEBI
performs following Role.
1.
Regulating the business in stock exchanges and may
other securities market.
2.
Registering and regulating the working of stock
brokers, share transfer agents, sub brokers, banker to an issue etc.
3.
Promoting and regulating self regulatory
organisations.
4.
Prohibiting fraudulent and unfair trade practices
relating to securities market.
5.
Registering and regulating the working of venture
capital funds and collective investment schemes including mutual funds.
6.
Promoting Investors education and training of
intermediaries of securities market.
7.
Prohibiting insider trading in securities.
8.
Conducting research and carrying out publications.
9.
Calling for information, form undertaking inspection,
conducting inquiries and audits of stock exchanges and market intermediaries.
OBJECTIVES of SEBI
The
main objectives of SEBI are as under.
1.
To promote fair dealing by the
issue of securities and to ensure a market place where (they) companies or institutions
can raise funds at relatively low cost.
2.
To provide protection to the
investors and protect their rights and interests so that there is a steady flow
of savings into the market.
3.
To regulate and develop a
code of conduct and fair practices by intermediaries like brokers etc. with a
view to make them competitive and professional.
POWERS OF SEBI
SEBI has given wide posers. Some of which are as
follow –
1.
SEBI can ask stock exchange
to maintain the prescribed documents and records.
2.
SEBI may ask stock exchange
or any member to furnish information and explanation concerning its affairs.
3.
SEBI can approve and amend
bye-laws of stock exchange.
4.
It may call periodical
returns from stock exchange.
5.
SEBI can licence dealers in
securities in some areas.
6.
It can ask a public company
to list its shares.
