Registration under Securities and Exchange Board of India

Registration under Securities and Exchange Board of India

Registration under Securities and Exchange Board of India

Securities and Exchange Board of India (SEBI) is a regulatory body of the Government of India. It controls the securities market. It was established on April 12, 1992, under the SEBI Act, 1992. SEBI is headquartered at the Bandra Kurla Complex in Mumbai, India. It has regional offices in major cities of India such as New Delhi, Kolkata, Chennai, and Ahmedabad. These cover the North, South, East, and West regions of India. Besides, it has a network of local branch offices in prominent Indian cities.

SEBI works on a corporate framework which compromises of various departments which are managed by each department head. Some of these departments are corporate, finance, economic, policy analysis, debt and etc. The hierarchical structure of SEBI consists of a chairman, two officers of the Union Finance Ministry, one member from the Reserve Bank of India and the five other members will be nominated by the Union Government of India.

SEBI is primarily set up to protect the interests of investors in the securities market. It promotes the development of the securities market and regulates the business. SEBI provides a platform for stockbrokers, sub-brokers, portfolio managers, investment advisers, share transfer agents, bankers, merchant bankers, trustees of trust deeds, registrars, underwriters, and other associated people to register and regulate work and it regulates the operations of depositories, participants, custodians of securities, foreign portfolio investors, and credit rating agencies. SEBI also prohibits inner trades in securities, i.e. fraudulent and unfair trade practices related to the securities market and it ensures that investors are educated on the intermediaries of securities markets.

The SEBI has three main powers which are quasi-judicial, quasi-executive and quasi-legislative.

Registration under SEBI:

As per section 12 of the Securities and Exchange Board of India 1992 says that the no stockbroker, sub-broker, share transfer agent, banker to an issue, trustee of the trust deed, registrar to an issue, merchant banker, underwriter, portfolio manager, investment adviser and such other intermediary who may be associated with securities market shall buy, sell or deal in securities except under the conditions of the registration which is obtained under the SEBI. If a person buying or selling securities or otherwise dealing with the securities market before the establishment of the Board for which no registration certificate was not necessary prior, may continue to do so for a period of 3 months or if he has made an application for the registration within the period of the said 3 months, till such application is disposed.

No depository, participant, custodian of securities, foreign institutional investor, credit rating agency, or any other intermediary associated with the securities market as the Board may by notification in this behalf specify, shall buy or sell or deal in securities except under and in accordance with the conditions and regulations of the certificate of registration obtained from the Board. If he has been doing such since before then he may continue to do so for a period of 3 months or is he has made an application for the same within the period of the said 3 months.

No person shall sponsor or cause to be sponsored or carry on or caused to be carried on any venture capital funds or collective investment schemes including mutual funds unless he obtains a certificate of registration from the Board in accordance with the regulations.

The application for registration shall be in the manner and on the payment of fees which is determined by the regulation. The Board can cancel or suspend the certificate in such manner which has been specified by the regulation but it can only be done until the concerned person is given an opportunity of being heard.

Penalty for not obtaining Registration:

If any person is carrying on business in the market under the securities then he shall be liable for the penalty of Rs. 1 Lakh, which may extend to Rs. 1 Lakh each day during which he carries on the business. It can also extend to Rs. 1 Crore.