SEBI must be more forward looking and real time facilitator for security market and not an authority to make un-necessary legislations and business difficult. Too much regulations are counterproductive – first part
THE SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992 No.15 of 1992 (in short SEBI Act)
Preamble of SEBI Act,
An Act to provide for the establishment of a Board to protect the interests of investors in securities and to promote the development of, and to regulate, the securities market and for matters connected therewith or incidental thereto.
Be it enacted by Parliament in the Forty-third Year of the Republic of India as follows: xxx
Analysis:
Through an enactment of the Parliament of India a Board is established.
The objects of the Board are:
to protect the interests of investors:
It relates to investors who invest in securities
To promote the development of the securities market.
To regulate, the securities market
And for matters relating to protection of investors in securities, promoting securities market, and connected and incidental matters.
Therefore, SEBI is an authority to act proactively to regulate security markets, security transactions, people and organisations who are involved in various activities in security market and activities related thereto.
And all related and incidental matters for which it is constituted and is authorised.
Therefore, SEBI is expected to act with immense foresight in policy making and
SEBI is also expected to act almost on real time basis in matters of enquiry, investigation etc. to protect investors.
Before SEBI:
Earlier the Controller of Capital Issues was authority and relevant provisions were contained in the Capital Issues (Control) Act, 1947 and Rules framed thereunder.
However, earlier complexities were less, security products were less and area of operations was also limited. Therefore, role of CCI was very limited and it did not concern much with security markets. The CCI was authority to consider and approve public issue of shares above certain limits applicable from time to time. After enactment of SEBI Act, there has been many changes and therefore various laws, Rules, and Regulations are applicable and many are enacted after SEBI Act.
Related enactments:
Various general laws are applicable in different circumstances. However on the website of the SEBI the following enactments are specifically mentioned or considered as directly relevant and incidental to security markets:
Securities Contracts (Regulation) Act, 1956 (As amended by the Finance Act, 2021 (13 of 2021) w.e.f. April 1, 2021)
Securities and Exchange Board of India Act, 1992 (As amended by the Finance Act, 2021 (13 of 2021) w.e.f. April 1, 2021)
Depositories Act 1996 (as amended by the International Financial Services Centres Authority Act, 2019 w.e.f. October 01, 2020)
Securities Laws (Amendment) Act. 2014
The Finance Act 2015
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Notifications under Finance Act for - Merger of FMC with SEBI
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Various Rules
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Securities Contracts (Regulations) Rules, 1957 [Last amended on July 30, 2021]
Securities Contracts (Reference to the Company Law Board) Rules, 1986
SEBI (Terms and Conditions of Service of Chairman and Members) Rules, 1992
SEBI (Appeal to Central Government) Rules, 1993
SEBI (Annual Report) Rules, 1994
SEBI (Form of Annual Statement of Accounts and Records) Rules, 1994
Companies (Issue of Global Depositories Receipts) Rules, 2014
SEBI (Annual Report) Rules, 2021
Regulations:
After SEBI Act there have been large number of new Regulations and many of them have been amended from time to time depending on new requirements due to more and more sophistication os security markets and various type of new functions, new functionaries which developed from time to time.
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Issued Year
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Regulations
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1992
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Securities and Exchange Board of India (Merchant Bankers) Regulations, 1992 [Last amended on August 03, 2021]
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1992
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Securities and Exchange Board of India (Stock Brokers) Regulations, 1992 [Last amended on August 03, 2021]
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1993
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Securities and Exchange Board of India (Debenture Trustees) Regulations, 1993 [Last amended on August 03, 2021]
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1993
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Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 - [Last amended on August 03, 2021]
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1994
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Securities and Exchange Board of India (Bankers to an Issue) Regulations, 1994 [Last amended on August 03, 2021]
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1996
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Securities and Exchange Board of India (Custodian) Regulations, 1996 [Last amendment on August 03, 2021]
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1996
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Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 [Last amended on August 03, 2021]
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1998
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SEBI (Buy Back Of Securities) Regulations, 1998 [Last amended on on March 6, 2017]
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1999
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Securities and Exchange Board of India (Collective Investment Scheme) Regulations, 1999 [Last amended on August 03, 2021]
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1999
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Securities and Exchange Board of India (Credit Rating Agencies) Regulations, 1999 [Last amended on August 03, 2021]
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2000
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Securities and Exchange Board of India (Foreign Venture Capital Investor) Regulations, 2000 [Last amended on August 03, 2021]
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2001
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SEBI (Procedure for Board Meetings) Regulations, 2001
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2001
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Securities and Exchange Board of India (Employees' Service) Regulations, 2001 [Last amended on August 05, 2020]
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2003
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SEBI (Ombudsman) Regulations, 2003 [Last Amended on Nov 09, 2006]
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2003
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SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003 [Last amended on October 19, 2020]
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2004
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SEBI (Self Regulatory Organisations) Regulations, 2004 [last amended on March 6, 2017]
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2006
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SEBI (Regulatory Fee on Stock Exchanges) Regulations, 2006 [Last amended on March 22, 2019]
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2007
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SEBI (Certification of Associated Persons in the Securities Markets) Regulations, 2007 [Last amended on February 07, 2014]
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2008
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Securities and Exchange Board of India (Intermediaries) Regulations, 2008 [Last amended on August 03, 2021]
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2008
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Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008 [Last amended on October 08, 2020]
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2008
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Securities and Exchange Board of India (Issue and Listing of Securitised Debt Instruments and Security Receipts) Regulations, 2008 [Last amended on August 03, 2020]
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2009
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SEBI (Investor Protection and Education Fund) Regulations, 2009 [Last amended on March 6, 2017]
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2009
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SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 (Last amended on February 12, 2018)
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2011
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Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 [Last amended on August 13, 2021]
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2011
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Securities and Exchange Board of India {KYC (Know Your Client) Registration Agency} Regulations, 2011 [Last amended on August 03, 2021]
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2012
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Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012 [Last amended on August 13, 2021]
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2013
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Securities and Exchange Board of India (Investment Advisers) Regulations, 2013 [Last amended on August 03, 2021]
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2013
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Securities and Exchange Board of India (Issue and Listing of Non-Convertible Redeemable Preference Shares) Regulations, 2013 [Last amended on August 03, 2021]
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2014
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Securities and Exchange Board of India (Infrastructure Investment Trusts) Regulations, 2014 [Last amended on August 03, 2021]
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2014
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Securities and Exchange Board of India (Real Estate Investment Trusts) Regulations, 2014 [Last amended on August 03, 2021]
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2014
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Securities and Exchange Board of India (Research Analysts) Regulations, 2014 [Last amended on August 03, 2021]
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2015
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SEBI (Procedure for Search and Seizure) Repeal Regulations, 2015
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2015
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Securities and Exchange Board of India (Issue and Listing of Municipal Debt Securities) Regulations, 2015 [Last amendment on August 03, 2021]
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2015
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Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 [Last amended on September 07, 2021]
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2015
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Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015 [Last amended on August 05, 2021]
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2018
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Securities and Exchange Board of India (Appointment of Administrator and Procedure for Refunding to the Investors) Regulations, 2018
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2018
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Securities and Exchange Board of India (Buy-back of Securities) Regulations 2018 [Last amended on August 03, 2021]
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2018
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Securities and Exchange Board of India (Depositories and Participants) Regulations, 2018 [Last amended on August 13, 2021]
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2018
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Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations 2018 [Last amended on August 13, 2021]
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2018
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Securities and Exchange Board of India (Settlement Proceedings) Regulations, 2018 [Last amended on July 22, 2020]
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2018
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Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) Regulations, 2018 [Last amended on August 13, 2021]
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2019
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Securities and Exchange Board of India (Foreign Portfolio Investors) Regulations, 2019 [Last amended on August 03, 2021]
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2020
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Securities and Exchange Board of India (Portfolio Managers) Regulations, 2020 [Last amended on August 03, 2021]
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2021
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Notification repealing Securities and Exchange Board of India (Central Database of Market Participants) Regulations, 2003
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2021
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Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2021 [Last amended on August 3, 2021]
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2021
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Securities and Exchange Board of India (Issue and Listing of Non-Convertible Securities) Regulations, 2021
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2021
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Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021
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2021
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Securities and Exchange Board of India (Underwriters) (Repeal) Regulations, 2021
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From the above list of enactments , Rules and Regulations and cursory review and memory recall of older times we find that many of them have been enacted from time to time and we can also feel that in some cases there was considerable delay in enactment due to several reasons and one of important reason can be described lack or inadequacy of fore sightedness.
Many provisions and amendment thereof can be called as experimental and just in zeal of exercise of power.
It can be felt that SEBI is considered a very powerful Board with authority to frame regulations.
In spite of the same we find that security markets have not been properly regulated and there are many malpractices going on in spite of heavy penal provisions.
There are lack of real time action, enquiry and remedial actions. Many enquiry and investigations are belated and loose the purpose.
The SEBI to be effective need to be more proactive and work on real time basis and objectively.
Penal provisions with huge amount of penalty which can be levied is a big headache for the concerned people.
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Forward looking should be approach:
SEBI must be a forward looking authority instead of an authority to make un-necessary enquiry and investigation in very old matters which only causes working problem , litigation and uncertainties.
Enquiry from small investors for old matters:
An enquiry for a very old matter from general investor – individuals, and small organisations which have some security business at some times in long past , seems beyond intended purposes of SEBI and authority for enquiry by SEBI. However, from website of SEBI we can find that large number of such cases are initiated.
This should come to an end and SEBI must consider itself a facilitator instead of a dictator and authority to make un-necessary enquiry, investigations and impose huge penalties.
Otherwise investors will continue to loose and cunning promoters, and manipulators will continue to loot gullible investors and public money of banks and financial institutions.
It is unfortunate to find that in spite of many regulations many companies which showed very rosy pictures and huge market capitalizations went burst and many of them have gone into liquidation and many are in process of IBC and liquidation. Many are just surviving with a fraction of market capitalization remaining and most of it lost. To name a few of such companies we can recall DFHL, AMTEK group of companies, Rolta, Moser bier, GT off shore, Yes Bank
