Revision of SEBI Act 1992

Introduction

• The SEBI (Securities and Exchange Board of India) Act 1992 is an important law that falls under securities law.
• It is included in both the old and new syllabus and will remain as long as the securities law subject exists.

Objectives of SEBI

• To protect the interests of investors.
• To develop the securities market.
• To regulate the securities market.

Establishment of SEBI

• SEBI is a body corporate with perpetual succession and a common seal.
• It can acquire, hold, and dispose of property.
• SEBI's head office is located in Mumbai.
• The management of SEBI consists of a Chairman, two officials from the Central Government's ministry, one official from the RBI, and five other members.

Management of SEBI

• The chairman of SEBI should be a person of ability, integrity, and standing.

Functions of SEBI

• To regulate, promote, and protect the securities market.
• To register and regulate stock exchanges, stock brokers, merchant bankers, etc.
• To prevent fraud and unfair trade practices.

Powers of SEBI

• SEBI has powers similar to a civil court, such as the discovery and production of books of accounts, summoning individuals, etc.
• SEBI can order that no asset or security be sold.

Penalty by SEBI

• A minimum penalty of 1 lakh rupees and a maximum of up to 1 crore rupees.
• In special cases, the penalty varies, such as a maximum of 25 crore rupees for insider trading.

Orders of SEBI

• During an investigation, SEBI can suspend any company from the stock exchange or prevent any person from accessing the securities market.

Investigation under SEBI

• Whenever SEBI investigates against any intermediary, it can inspect all their books of accounts.

SEBI and Legal Process

• An appeal can be made against SEBI's orders in the SET (Securities Appellate Tribunal).
• The procedure of SET is simple and follows the principles of natural justice.

SCORES System

• Complaints can be filed in SCORES (SEBI Complaints Redress System).
• Various types of complaints are not covered under SCORES, such as against unlisted companies.
• SCORES time limit: The issue must be resolved within 30 days.

SEBI Informal Guidance Scheme

• Under the SEBI Informal Guidance Scheme 2003, anyone can ask SEBI about the interpretation of the law.

Conclusion

• There are many processes and systems under the SEBI Act 1992 that assist in regulating the securities market and keeping investors safe.

These notes summarize all the important points of the SEBI Act and can be helpful for exams.