ROLE OF SEBI

INTRODUCTION:

In 1988 the Securities and Exchange Board of India (SEBI) was established by the government of India through an executive resolution, and was subsequently upgraded as a fully autonomous body (a statutory Board) in year 1992 with the passing of the Securities and Exchange Board of India Act (SEBI Act) on 30th January 1992. In place of government control, a statutory and autonomous regulatory board with defined responsibilities, to cover both development & regulation of the market, and independent powers has been set up. Paradoxically this is a positive outcome of the Securities scam of 1990-91.
SEBI has introduced the comprehensive regulatory measures, prescribed registration norms, the eligibility criteria, the code of obligations and the code of conduct for different intermediaries like, bankers to issue, merchant bankers, brokers and sub-brokers, registrars, portfolio managers, credit rating agencies, underwriters and others. It has framed bye-laws, risk identification and risk management systems for clearing houses of stock exchanges, surveillance system etc. This has made dealing in securities both safe and transparent to the investor.


EXPLAINATION:

The securities and Exchange Board of India (SEBI) has sought explanation from its executive directors (EDs) in charge of the secondary markets department (SMD) and surveillance division and concerned officers during the period 1999-2000 for their failure to comply with the various actions recommended in the inspection reports of different stock exchanges.

The sebi action on this front comes in the wake of observations made by parliamentary committee (JPC) on the issue of performance of sebi’s nominee directors. JCP had recommended that explanations be called for immediately from all concerned officials in sebi who were involved in the inspection of the Calcutta Stock Exchange (CSE) during 1999-2000 regarding their failure to detect non-inclusion of crystallized long position in the outstanding position of the brokers and action be taken against them for dereliction of duty.

JPC had observed that the attendance record of some of the sebi’s nominee directors in the governing board meeting has been very poor, in as much as one nominee director in CSE did not attend even a single sitting out of 53 sittings during his tenure from October 1991 to April 1993 and another did not attend any sitting out of 26 sitting during his tenure from November 1996 to June 1998.
Through sebi has withdrawn its official nominees from the board of stock exchanges, there are other directors who are on the boards of the bourses as sebi nominees. The regulator would shortly issue a code of conduct for such nominee directors, sebi said in its ATR.
As regards the attendance of directors, the regulator sain it is monitoring the attendance of public representatives and nominees directors and has taken up the matter for discontinuance of any director who is found to be wanting in regular attendance.


CONCLUSION:

SEBI wants companies buying PNs to invest directly by registering with them to moderate the forex inflow. Earlier, the market nose-dived on October 17th after SEBI recommended curbing PNs. Market experts say that such measure will be beneficial in the longer term and will also moderate the suspicious capital inflow in the Indian market.