Power of SEBI (Security Exchange Board Of India)

Power to issue directions.

The Board is satisfied that it is necessary,- 

(i) in the interest of investors, or orderly development of securities market; or 

(ii) to prevent the affairs of any intermediary or other persons referred to in section 12 being conducted in a manner detrimental to the interest of investors or securities market; or 

(iii) to secure the proper management of any such intermediary or person, it may issue such directions,- 

(a) to any person or class of persons referred to in section 12, or associated with the securities market; or 

(b) to any company in respect of matters specified in section 11A, as may be appropriate in the interests of investors in securities and the securities market]

Power Of Investigation.

11C. (1) Where the Board has reasonable ground to believe that –

(a)the transactions in securities are being dealt with in a manner detrimental to the investors or the securities market; or

(b)any intermediary or any person associated with the securities market has violated any of the provisions of this Act or the rules or the regulations made or directions issued by the Board

It may, at any time by order in writing, direct any person (hereafter in this section referred to as the Investigating Authority) specified in the order to investigate the affairs of such intermediary or persons associated with the securities market and to report thereon to the Board.

(2) Without prejudice to the provisions of sections 235 to 241 of the Companies Act, 1956(1 of 1956), it shall be the duty of every manager, managing director, officer and other employee of the company and every intermediary referred to in section 12 or every person associated with the securities market to preserve and to produce to the Investigating Authority or any person authorised by it in this behalf, all the books, registers, other documents and record of, or relating to, the company or, as the case may be, of or relating to, the intermediary or such person, which are in their custody or power. 

The Investigating Authority shall keep in its custody the books, registers, other documents and record seized under this section for such period not later than the conclusion of the investigation as it considers necessary and thereafter shall return the same to the company or the other body corporate, or, as the case may be, to the managing director or the manager or any other person, from whose custody or power they were seized and inform the Magistrate of such return;

Provided that the Investigating Authority may, before returning such books, registers, other documents and record as aforesaid, place identification marks on them or any part thereof.

Cease and desist proceedings.

If the SEBI Board finds, after causing an inquiry to be made, that any person has violated, or is likely to violate, any provisions of this Act, or any rules or regulations made thereunder, it may pass an order requiring such person to cease and desist from committing or causing such violation:

Provided that the Board shall not pass such order in respect of any listed public company or a public company (other than the intermediaries specified under section 12) which intends to get its securities listed on any recognized stock exchange unless the Board has reasonable grounds to believe that such company has indulged in insider trading or market manipulation.] 

1.Power to Manage and regulate stock exchanges:

It has power to manage all the affairs of stock echange as well as regulation of stock exchanges

2.Get explanation from recognized stock exchanges or their members.

It has power to get explanation from recognised Stock exchanges or their memebers.

3. Powers relating to stock exchanges & intermediaries

SEBI has wide powers regarding the stock exchanges and intermediaries dealing in securities. It can ask information from the stock exchanges and intermediaries regarding their business transactions for inspection or scrutiny and other purpose.

4. Power to impose monetary penalties

SEBI has been empowered to impose monetary penalties on capital marketintermediaries and other participants for a range of violations. It can even impose suspension of their registration for a short period.

5. Power to initiate actions in functions assigned

SEBI has a power to initiate actions in regard to functions assigned. For example, it can issue guidelines to different intermediaries or can introduce specific rules for the protection of interests of investors.

6. Power to regulate insider trading

SEBI has power to regulate insider trading or can regulate the functions of merchant bankers.

7. Powers under Securities Contracts Act

For effective regulation of stock exchange, the Ministry of Finance issued a Notification on 13 September, 1994 delegating several of its powers under the Securities Contracts (Regulations) Act to SEBI.

SEBI is also empowered by the Finance Ministry to nominate three members on the Governing Body of every stock exchange.

8. Power to regulate business of stock exchanges

SEBI is also empowered to regulate the business of stock exchanges, intermediaries associated with the securities market as well as mutual funds, fraudulent and unfair trade practices relating to securities and regulation of acquisition of shares and takeovers of companies.

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

1.to approve by−laws of stock exchanges.sebi
2.to require the stock exchange to amend their by−laws.
3.inspect the books of accounts and call for periodical returns from recognized stock exchanges.
4.inspect the books of accounts of a financial intermediaries.
5.compel certain companies to list their shares in one or more stock exchanges.
6.registration brokers.
there are two types of brokers.

1.circuit broker
2.merchant broker