SEBI stands for the Securities and Exchange Board of India that was established in the year 1988 by the Government of India. SEBI was established to regulate the functions of the stock market. Previously, SEBI did not have the power to control the stock market and was a non-statutory body. Later, the Union Government established SEBI as an anonymous body with statutory powers by passing the SEBI Act 1992.
The main purpose of SEBI is to safeguard the rights and interests of the investor, reduce malpractices related to the stock exchange, establishing a code of conduct and promoting the healthy functioning of the stock exchange.
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The functions of the Securities and Exchange Board of India can be categorized into three parts:
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Outlined below are the main objectives of SEBI:
The main objective is to create an environment that facilitates the effective mobilization and allocation of resources, through the securities market. SEBI enforces rules and regulations, policy framework, practices and infrastructure to meet the needs of three groups which mainly constitute the market i.e. issuers of securities (companies), the investors and the market intermediaries. It was setup to meet the needs of the following groups:
For issuers, it provides a market place in which they can raise funds in an easy and efficient manner.
For investors, it provides protection and supplies accurate and correct information on a regular basis.
For intermediaries, it provides a competitive professional market. It also helps intermediaries provide better service to the investors and issuers by giving them efficient infrastructure.
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