Role of SEBI in Indian Capital Market.
                     ROLE OF SEBI IN INDIAN 
CAPITAL MARKET
INTRODUCTION
 The Securities and Exchange Board of India (SEBI) 
was officially appointed as the authority for 
regulating the financial markets in India on 12th 
April 1988.
 SEBI plays an important role in regulating the 
securities market of India.
Source: www.elearnmarkets.com
WHY WAS SEBI FORMED?
 At the end of the 1970s and during 1980s, capital 
markets were emerging as the new sensation 
among the individuals of India.
 The government felt a sudden need to set up an 
authority to regulate the working and reduce these 
malpractices. 
 As a result, the Government came up with the 
establishment of SEBI.
Source: www.elearnmarkets.com
ROLE OF SEBI
POWER TO MAKE RULES FOR 
CONTROLLING STOCK EXCHANGE
• SEBI has power to make new rules for 
controlling stock exchange in India. 
• For example, SEBI fixed the time of  
trading 9 AM and 5 PM in stock 
market.
Source: http://www.svtuition.org/
TO PROVIDE LICENSE TO DEALERS 
AND BROKERS
• SEBI has power to provide license to 
dealers and brokers of capital 
market. 
• If SEBI observes that any financial 
product is of capital nature, then SEBI 
can also control to that product and 
its dealers. 
Source: http://www.svtuition.org/
STOP FRAUD IN CAPITAL MARKET 
• SEBI can ban on the trading of those 
brokers who are involved in 
fraudulent and unfair trade practices 
relating to stock market.
Source: http://www.svtuition.org/
CONTROL THE MERGE, ACQUISITION 
AND TAKEOVER THE COMPANIES
• Many big companies in India want to 
create monopoly in capital market. 
• So, these companies buy all other 
companies or deal of merging. 
• SEBI sees whether this merge or 
acquisition is for development of 
business or to harm capital market.
Source: http://www.svtuition.org/
TO AUDIT THE PERFORMANCE OF 
STOCK MARKET
• SEBI uses his powers to audit the 
performance of different Indian stock 
exchange for bringing transparency 
in the working of stock exchanges.
Source: http://www.svtuition.org/
ISSUERS OF SECURITIES
• These are entities in the corporate 
field that raise funds from various 
sources in the market. 
• SEBI makes sure that they get a 
healthy and transparent environment 
for their needs.
Source: http://www.svtuition.org/
PORTFOLIO MANAGEMENT ACTIVITIES
• SEBI has also power to require report 
of portfolio management to check the 
capital market performance. 
• Recently, SEBI sent the letter to all 
Registered Portfolio Managers of 
India for demanding report.
Source: http://www.svtuition.org/