2.6What does SEBI do?
1What is it?
SEBI makes rules for, registers and supervises everyone in the market, and punishes wrongdoing.
2Why does it exist?
Its three goals are: protect investors, develop the market and regulate intermediaries.
3Stock market example
Examples of SEBI actions:
- Approves IPO offer documents and sets disclosure rules.
- Registers brokers, mutual funds, investment advisers and research analysts.
- Bans insider trading and price manipulation, with fines and trading bans.
- Introduced T+1 settlement, upfront margin rules and limits on F&O to protect retail traders.
- Runs SCORES, an online system for investor complaints.
4Diagram
SEBI
Stock exchanges
- • NSE
- • BSE
Intermediaries
- • Brokers
- • Depositories & DPs
- • Mutual funds
Companies
- • IPOs
- • Disclosures
Investors
- • Complaints (SCORES)
- • Education
5Practical use
Before trusting anyone giving stock tips or advice, check that they are SEBI-registered on sebi.gov.in. Unregistered "tip providers" on Telegram or WhatsApp are a major source of fraud.
6Quick revision
- SEBI makes rules, registers intermediaries, investigates and penalises.
- It protects investors and develops markets.
- Complaints can be filed on SCORES.
7Knowledge check
Q1. Name SEBI’s three main goals.Show answer
Protect investors, develop the market and regulate intermediaries.
Q2. Where can investors file complaints?Show answer
On SEBI’s SCORES portal.
Q3. Should you follow an unregistered Telegram tipster?Show answer
No. Check SEBI registration; unregistered advice is often fraud.