Securities and Exchange Board of India

Overview

The Securities and Exchange Board of India (SEBI) is the regulatory agency for securities and commodity market in India under the administrative domain of Ministry of Finance within the Government of India. It was established on 12 April 1988 as an executive body and was given statutory powers on 30 January 1992 through the SEBI Act, 1992. SEBI has been the subject of multiple allegations of regulatory capture through its perceived favouritism towards certain conglomerates, raising questions about its credibility and integrity.

History

The SEBI was first established in 1988 as a non-statutory body for regulating the securities market. Before it came into existence, the Controller of Capital Issues was the market's regulatory authority, and derived power from the Capital Issues (Control) Act, 1947. The SEBI became an autonomous body on 30 January 1992 and was accorded statutory powers with the passing of the SEBI Act, 1992 by the Parliament of India. It has its headquarters at the business district of Bandra Kurla Complex in Mumbai and has Northern, Eastern, Southern and Western Regional Offices in New Delhi, Kolkata, Chennai, and Ahmedabad, respectively. Up until June 2023, it also had 17 local offices spread all over India to promote investor education; however, 16 of them were closed as part of a restructuring exercise. The SEBI is managed by its 9-member board of members, which consist of the following people:

The chairman, who is nominated by the Union Government of India. Two members from the Union Finance Ministry. One member from the Reserve Bank of India. The remaining five members are nominated by the Union Government of India, and out of them at least three should be whole-time members. After the amendment of 1999, collective investment schemes were brought under the SEBI except nidhis, chit funds and cooperatives.

Organisation structure

Tuhin Kanta Pandey took charge as Chairman on 1 March 2025, replacing Madhabi Puri Buch, whose term ended on 28 February 2025.

Current board members

The board currently comprises:

List of Chairpersons

The list of SEBI's chairpersons is:

Departments

SEBI regulates Indian financial market through its 20 departments.

National Apex Bodies

National Institute of Securities Markets

Functions and responsibilities

The Preamble of the Securities and Exchange Board of India describes the basic functions of the Securities and Exchange Board of India as "...to protect the interests of investors in securities and to promote the development of, and to regulate the securities market and for matters connected there with or incidental there to". SEBI has to be responsive to the needs of three groups, which constitute the market:

issuers of securities investors market intermediaries SEBI has three powers rolled into one body: quasi-legislative, quasi-judicial and quasi-executive. It drafts regulations in its legislative capacity, it conducts investigation and enforcement action in its executive function and it passes rulings and orders in its judicial capacity. Though this makes it very powerful, there is an appeal process to create accountability. There is a Securities Appellate Tribunal which is a three-member tribunal and is currently headed by Justice Tarun Agarwala, former Chief Justice of the Meghalaya High Court. A second appeal lies directly to the Supreme Court. SEBI has taken a very proactive role in streamlining disclosure requirements to international standards. In October 2025, SEBI issued a consultation paper proposing new incentives for retail investors in corporate bonds such as higher coupon rates or issue-price discounts for certain investor categories and recommended raising the threshold for High-Value Debt Listed Entities to ease compliance for issuers.

Powers

For the discharge of its functions efficiently, SEBI has been vested with the following powers:

to approve by−laws of Securities exchanges. to require the Securities exchange to amend their by−laws. inspect the books of accounts and call for periodical returns from recognised Securities exchanges. inspect the books of accounts of financial intermediaries. compel certain companies to list their shares in one or more Securities exchanges. registration of Brokers and sub-brokers. eliminate malpractices in security market. SEBI committees

Technical Advisory Committee Committee for review of structure of infrastructure institutions Advisory Committee for the SEBI Investor Protection and Education Fund Takeover Regulations Advisory Committee Primary Market Advisory Committee (PMAC) Secondary Market Advisory Committee (SMAC) Mutual Fund Advisory Committee Corporate Bonds & Securitisation Advisory Committee There are two types of brokers:

Discount brokers Merchant brokers

Major achievements

SEBI has enjoyed success as a regulator by pushing systematic reforms aggressively and successively. It is credited for quick movement towards making the markets electronic and paperless by introducing the T+5 rolling cycle in July 2001, the T+3 in April 2002, and the T+2 in April 2003. The rolling cycle of T+2 means that settlement is done in 2 days after trade date. SEBI has also been active in setting up the regulations as required under law. It did away with physical certificates that were prone to postal delays, theft and forgery, apart from making the settlement process slow and cumbersome, by passing the Depositories Act, 1996. SEBI has also been instrumental in taking quick and effective steps in light of the global meltdown and the Satyam fiasco. In October 2011, it increased the extent and quantity of disclosures to be made by Indian corporate promoters. In light of the global meltdown, it liberalized the takeover code to facilitate investments by removing regulatory structures. In one such move, SEBI has increased the application limit for retail investors to ₹200,000 (US$2,100) from ₹100,000 (US$1,000) at present. On the occasion of World Investor Week 2022, SEBI Executive Director Shri G. P. Garg launched a book on Financial Literacy. This book is a joint effort between Metropolitan Stock Exchange of India Limited and CASI New York.

September 2026 board decisions

On 24 September 2026, the SEBI board approved an overhaul of the portfolio manager regulations. The changes include a Portfolio Managers Route for Investing in Mutual Fund Units (PRIM), under which portfolio managers may invest client funds in direct mutual fund schemes and specialised investment funds with a minimum ticket size of ₹25 lakh (US$26,000); a new category of "independent fund managers"; and permission to invest in initial public offerings and primary-market debt issuances. The board also allowed foreign portfolio investors to participate in physically settled non-agricultural commodity derivative contracts, approved changes to settlement proceedings, permitted real estate and infrastructure investment trusts to issue depository receipts in permissible overseas jurisdictions, and approved a common advertisement code for certain regulated entities.

Regulatory failure, inaction, and incompetence

Several major financial scams have shaken the Indian market, like the Satyam scam, IL&FS crisis, Punjab National Bank Scam, and NSE co-location scam. Critics argue that SEBI failed to properly monitor these companies or take timely action when irregularities were noticed. There have been instances where market intermediaries engaged in fraudulent activities, which resulted in significant losses for investors. SEBI’s monitoring of these intermediaries has been called into question. SEBI has been criticized for its inability to effectively regulate and prevent insider trading, despite having regulations in place. There have been numerous cases where insider trading went undetected for long periods. The Securities and Exchange Board of India (SEBI) has been criticized for not being able to effectively prevent market manipulation and pump and dump schemes. Reasons include limited resources, reliance on stock exchanges for market data, a lack of a comprehensive legal framework with stringent penalties, slow response times, and a lack of coordination with other regulatory bodies.