Preparing for JAIIB 2026 requires clarity in basic financial and regulatory concepts. One of the most important and scoring topics in the Indian Economic & Financial System paper is SEBI and its Functions. For banking professionals, understanding SEBI is not just important for the exam but also for practical knowledge of how India’s securities market is regulated. In this detailed blog, we will cover all essential points about SEBI its meaning, objectives, structure, powers, and functions in simple and professional language for quick revision.
What is SEBI?
The Securities and Exchange Board of India (SEBI) is the statutory regulatory authority that regulates and monitors the securities market in India. It ensures that the capital market functions in a fair, transparent, and efficient manner while protecting the interests of investors.
SEBI was established on 12th April 1992 under the SEBI Act, 1992. The main objective behind its establishment was to prevent malpractices in the securities market and to promote the healthy development of the capital market in India.
The headquarters of SEBI is located at Bandra-Kurla Complex, Mumbai. It also has regional offices in New Delhi, Chennai, Kolkata, and Ahmedabad, along with local offices in Bangalore, Jaipur, Chandigarh, Patna, Guwahati, and Kochi.
- Established on: 12 April 1992
- Established under: SEBI Act, 1992
- Type: Statutory Regulatory Body
- Headquarters: Mumbai
- Regulates: Securities and Capital Market in India
- Main Purpose: Protect investors and regulate the securities market
What are the objectives of SEBI?
The objectives of SEBI focus on ensuring investor protection and smooth functioning of the securities market. It works to maintain trust and discipline in the capital market.
- Protection of Investors – SEBI safeguards the interests of investors by ensuring fair practices in the securities market.
- Prevention of Malpractices – It prevents fraud, unfair trade practices, insider trading, and price manipulation.
- Fair and Proper Functioning of the Market – SEBI ensures that stock exchanges and intermediaries function transparently and efficiently.
Also Check: SEBI Notification 2026
What is the organizational structure of SEBI?
SEBI has a structured governing body to ensure proper administration and decision-making. SEBI consists of nine members, including:
| Position | Appointed By |
| Chairman | Government of India |
| Two Members | Union Finance Ministry |
| One Member | Reserve Bank of India |
| Five Members | Government of India |
Also Check: JAIIB Registration 2026
What is SEBI’s charter?
SEBI’s charter defines the groups it is responsible for regulating and protecting. SEBI works for three main groups:
- Issuers of Securities – Companies that issue shares and bonds.
- Investors – Individuals and institutions investing in securities.
- Market Intermediaries – Brokers, sub-brokers, merchant bankers, and other financial intermediaries.
What are the powers of SEBI?
SEBI has wide-ranging powers to regulate and control the securities market. These powers help maintain discipline and transparency.
- Sanctions and regulates laws related to stock exchanges.
- Examines accounts and books of records of stock exchanges.
- Arranges hearings and passes judgments in case of malpractice.
- Permits companies to be listed on stock exchanges.
- Orders companies to be delisted from stock exchanges.
- Expels or penalizes companies following unethical practices.
- Allows companies to float shares on more than one stock exchange if beneficial to investors.
- Drafts and regulates legal rules to protect investors.
- Regulates registration of brokers and other intermediaries.
What are the functions of SEBI?
SEBI performs three major functions to ensure smooth functioning of the securities market. These are:
- Regulatory Functions
- Protective Functions
- Development Functions
What are the regulatory functions of SEBI?
Regulatory functions help maintain discipline and smooth functioning of businesses in the securities market.
- Issues guidelines and code of conduct for corporate and financial intermediaries.
- Assists in the takeover of companies.
- Conducts inquiries and audits.
- Registers merchant bankers, brokers, and sub-brokers.
- Levies fees for services and registration.
- Registers and regulates credit rating agencies.
What are the protective functions of SEBI?
Protective functions are aimed at safeguarding the interests of investors and maintaining fairness in the market.
- Promotes fair practices – SEBI establishes regulations and code of conduct in the securities market.
- Checks price rigging – Price rigging causes artificial fluctuations in security prices, leading to investor losses. SEBI controls such practices.
- Prevents insider trading – Insider trading involves buying and selling securities based on confidential information. SEBI prohibits such activities to protect investors.
- Prohibits fraudulent and unfair trade practices
- Creates awareness and promotes transparency among investors
What are the development functions of SEBI?
Development functions focus on the growth and improvement of the securities market.
- Encourages buying and selling of mutual funds through Asset Management Companies (AMCs) via brokers.
- Promotes fair trading practices.
- Reduces malpractices and unfair trade practices.
- Encourages self-regulating organizations (SROs).
- Imparts training to intermediaries.
- Conducts research activities related to the securities market.
FAQs: Frequently Asked Questions
SEBI was established on 12 April 1992 under the SEBI Act, 1992.
The main objective of SEBI is to protect investors and regulate the securities market in India.
SEBI’s headquarters is located at Bandra-Kurla Complex, Mumbai.
SEBI consists of nine members including a Chairman appointed by the Government of India.
The three main functions of SEBI are Regulatory, Protective, and Development functions.
Hi, I’m Aditi. I work as a Content Writer at Oliveboard, where I have been simplifying exam-related content for the past 4 years. I create clear and easy-to-understand guides for JAIIB, CAIIB, and UGC exams. My work includes breaking down notifications, admit cards, and exam updates, as well as preparing study plans and subject-wise strategies.
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