SEBI - ROLE AND REGULATIONS

SEBI - ROLE AND REGULATIONS (Part 1)

Definition: The Securities and Exchange Board of India (SEBI) is the apex regulator of the securities market in India, responsible for its orderly growth and protection of investors' interests.
Details: SEBI was established on April 12, 1992, in accordance with the provisions of the Securities and Exchange Board of India Act, 1992.

Regulation: SEBI regulates the securities market, including stock exchanges, brokers, and other intermediaries.
Investor Protection: SEBI's primary objective is to protect the interests of investors in the securities market.
Market Development: SEBI aims to promote the development of the securities market in India.

SEBI (Prohibition of Insider Trading) Regulations, 2015: These regulations prohibit insider trading, which refers to the dealing in securities by persons connected with a company having unpublished price-sensitive information.
SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003: These regulations prohibit fraudulent and unfair trade practices relating to the securities market.

Definition: The IEPF is a fund created by the Ministry of Corporate Affairs to promote investors' awareness and protect their interests.
Details: The fund is administered by the Investor Education and Protection Fund Authority, which refunds shares, unclaimed dividends, matured deposits/debentures, etc. to investors and promotes awareness among investors.

Investigation: SEBI has the power to investigate into cases of market manipulation, insider trading, and other unfair trade practices.
Penalties: SEBI can impose penalties, including monetary penalties, suspension, and cancellation of registration, on violators of its regulations.

The Investor Education and Protection Fund (IEPF) is utilised for making refunds in respect of unclaimed dividends, matured deposits/debentures, etc. to investors.
It also promotes investors' education, awareness, and protection through various investor awareness programs and other initiatives.
The fund is comprised of money that has remained unpaid and unclaimed for a period of 7 years from the date they were due for payment.

Registrars and Transfer (R&T) agents are identified as 'intermediaries' by the SEBI Act and are regulated by SEBI.
They have to abide by the regulations and guidelines of the regulator, including:
- SEBI (Registrars to an Issue and Share Transfer Agents) Regulations, 1993
- SEBI (Intermediaries) Regulations, 2008
- SEBI (Depositories and Participants) Regulations, 2018

These regulations govern the constitution, capital adequacy, obligations, and responsibilities of R&T agents.
They also cover inspection and reporting norms that R&T agents must abide by.

These regulations consolidate the common requirements that apply to all intermediaries, including R&T agents.
Key features include:
- Grant of registration
- General obligations
- Code of conduct
- Procedure for action in case of default
- Miscellaneous provisions
Intermediaries must:
- Appoint a compliance officer
- Redress investor grievances within 45 days
- Make complete disclosure of interest before making any recommendation to invest in a security
- Abide by the specified code of conduct

R&T agents are allowed to be participants of a depository under these regulations.
They must abide by the regulations for their activities in this capacity.
Participants must:
- Pay fees and maintain records
- Address investor complaints within the specified time
- Comply with all requirements subject to which the certificate was granted
- Abide by the code of conduct for participants, which requires them to protect investors' interests, address complaints, and cooperate with the regulator.