Last Updated: Apr 18, 2024 Value Broking 8 Mins 1.7K
objectives of sebi

SEBI, the Securities and Exchange Board of India was established in 1988 with the aim to regulate the securities market in India. It is the market maker which plays the role of moderator and acts as a catalyst to the harmonious growth of the stock market. Although, later on,as time passed, it gradually began to be SEBI that issued directives on stock market dealings. ⁤⁤It could neither exercise the authority nor supervision of the processes; it could only work as a watchdog. Therefore, SEBI was accredited with the regulatory powers on a permanent basis and it is now a self-governing organisation with legal entity, corporate body and perpetual succession. Focusing on the historical evolution of the SEBI, is quite revealing of how SEBI has been developing its objectives and functions over the years. In this article, we will discuss the functions and objectives of SEBI.

Objectives of SEBI

Role of SEBI is not only limited to laying down ground as it intentionally creates a market in which the investors can rely on and trust what they are doing. Here, we delve into the objectives of SEBI, each designed to protect and fortify the securities market:Here in SEBI came in lots of objectives to make sure the securities market gets bounded and is safe. It aims for the following:

  • Protecting Investor Rights:

SEBI’s primary aim of establishing and maintaining a fair and orderly market system goes along with protection of individual investors’ rights and interests. This spans the issue of security within the space so that investors rest confidently in the fact that the markets are free from fraudulent activities and manipulations.

  • Preventing Malpractices:

SEBI, however, is consistently wired to weed out malpractices within the securities market. These comprise financial practices such as market manipulation, insider trading, and others. SEBI’s rigidly enforced regulations and intensive surveillance provide an assurance that all market participants get the fairest competition at all times.

  • Code of Conduct for Intermediaries:

A particular code of business conduct observed by intermediaries is stressed by SEBI founded on a market-oriented approach. This code will try to define ethical standards of activities of brokers, investment advisors, portfolio managers and other intermediaries that are in the market and will make sure they perform their tasks with the highest degree of transparency. Investors thus can build up trust and confidence in the system and the market ecosystem as SEBI does so.

  • Efficient Functioning of Capital Markets:

The objective of SEBI is not only promoting the up-to-date operating process of capital markets, but also a comprehensive one. Perhaps, the essence is to find common grounds for both voluntary self-monitoring and regulatory oversight. Through the provision of a setting that reinforces adherence to the rules and regulations, INPC ensures the prosperity and aid of increased effectiveness in the capital market, thereby contributing to economic growth.

  • Market Development and Growth:

SEC continues to actively put in place measures so as to foster the growth of the securities market. Besides improving market infrastructure and prompting innovation, other initiatives will be used, such as the focus on attracting the local and foreign investment market. SEBI makes safe and attractive capital market conditions that lay the ground for economic growth in the country through its activities.

  • Investor Education and Awareness:

Through its education mission, SEBI assists investors to understand the complex working of the securities market which is an important aspect. A fundamental catalyst of investor confidence is one of SEBI’s goals, that is missionizing investors with the requisite knowledge and information for them to make rational decisions, this is through the organization awareness programs, lectures, and articles.

  • Enforcing Regulatory Compliance:

SEBI’s goal also lies in upholding the regulations and bringing all market players to regulatory conformity. This typically involves the supervision and enforcement of all entities such as listed companies, brokers and intermediaries to act within the confined parameters governed by the regulatory rules and regulations. It happens that with the same actions SEO (SEBI) ensures the reliability and reliability of the market.

Functions of SEBI

Playing a diverse role, the Securities and Exchange Board of India (SEBI), is the guardian of the securities market of India. Though it has an important role in preserving the integrity of financial markets, sheltering investors from fraud and promoting fair play, it still needs regulation to work adequately. SEBI’s functions can be broadly categorized into three main areas:

Protective Functions:

  • Monitoring Price Rigging: SEBI supervises the markets for any activities that are designed to artificially rise or fall prices. Therefore, this system takes the role of buffer and makes sure that the investors always stay away from unfair financial losses. The purpose of this inclusion is to ultimately create and maintain a sense of fairness and stability in the broader market.
  • Restricting Insider Trading: SEBI enforces a stringent insider trading regulation to avoid such a situation where market players take an advantage of information available to them and hence, gain financially. This way redistribution of information across the markets is leveled and the investors are all treated fairly regardless of the source they receive the information from.
  • Preventing Unfair Trading Practices: SEBI undergoes permanent anticipatory scrutiny to ensure the non-occurrence of the dishonest as well as the exploitative dealings within the securities market. Implementing powerful framework regulations specifies a stable and trustworthy environment that assures investors of security and maintenance of integrity of the Stock Market.
  • Investor Education: Investors’ education becomes a top priority for SEBI. The institute organizes different education programs ranging from seminars, online sessions, improving the individual’s knowledge in investment strategies and the market dynamics. Adopting being proactive, investors are consequently able to be knowledgeable enough to be able to make informed decisions.

SEBI helps to build a robust platform for a market where it is possible to fully understand all transactions taking place, wherein everything is treated equally, and there is no way for anybody to interfere with the system which ensures total security. Investors benefit from a regulated environment with confidence so interested investors can invest their capital knowing that active monitoring of fraudulent practices would not exist.

Power of SEBI

  • A SEBI board possesses all the powers as it has been granted under Section 10 to conduct spot checks at the places which are assumed to be the sites for keeping the books of account, documents, vouchers, computer discs, or storage devices related to the securities market in general. Such cases where it is necessary are preceded by it actually confiscating them.
  • Under section 11, SEBI enjoys the power to issue search warrants for the locations/premises occupied by any persons suspected of committing the offenses punishable according to the Act.
  • Under Section 12 of the Act, the power to arrest without warrant is available to SEBI for arrest of those who committed the offense which is claimed punishable under the Act. It is clear from here that this court can assign a duty or function to anyone among SEBI’s officials or to any other police officer not below the rank of Assistant Superintendent of Police.
  • Power of Service and Attachment: Through its officials, SEBI or any authorized officer acting on its behalf is able to serve a copy of its orders to the relevant parties. Moreover, it has the right to seize their belongings while the Act is still in effect. 
  • Appointment of Officials and Others (Section 19), the authority may administer officers, employees, and additional personnel whoever is needed to fulfill the objective of the Act. Likewise it can also authorise those senior or subordinate officers to perform SEBI officer’s roles.
  • Making the Rules, The Board, after consultation with the Central Government which will appoint these rules with a notification in the Official Gazette, sets using its powers of rule-making, directives in harmony with the Act, in tandem with its aim. For instance, The ‘Securities and Exchange Board of India (Futures Trading) Regulations, 2004’ are the type of rules that are a part of such regulations.
  • Impose Sanctions, One of the powers among others, SEBI is granted the authority at section 21 to begin proceedings before the Appellate Tribunal upon sanction the same as the prosecution under the act when they have been authorized. Because just as a notary public official does independently, SEBI keeps detailed records and presentations of all proceedings it investigates.


SEBI by keeping fair dealing through stock trading and protecting the investor are the all-weather pillars of Indian economic sector. One of its many goals that are fundamental for the development of a reliable, robust and reputable capital market is to prevent illicit trading. The regulatory power given to the Securities and Exchange Board of India includes authority to enforce rules and regulations, conduct audits, and take disciplinary action on market players. These activities help check disorders in the market resulting in building confidence among investors that eventually strengthen the financial ecosystem. A hardy and resourceful securities market of India is to be structured by the inspecting eye of SEBI, which is going to stay like that forever.

Frequently Asked Questions (FAQs)

SEBI does so by keeping in check market operations, enforcing an ethical model, instilling transparency, educating investors and ensuring that any kind of deceptive activity are strictly barred in order preserve the integrity of the market.

SEBI is an umbrella organization that handles several aspects of the securities markets; it registers market intermediaries, supervises stock exchanges, enforces securities law, ensures investor education and awareness.

SEBI enforces proper corporate governance by imposing disclosure obligations, financial reporting standards, corporate codes and patrolling companies to safeguard outside parties' interests.