SEBI Act

 

(Policies of Indian law on the Indian Stock Market) 

 

Hello, everyone! 

Have a nice day! 

Today, I have come up with a new interesting topic. And the topic all about stock market law in India. Then, let the volcano of your knowledge erupt!  Let's start the journey of mystery land of Indian law! 

Share market is where shares or stocks are traded, brought or sold. When company register itself for the first time to sell shares, it is called IPO. The primary company sell shares to raise its capital and after rising the capital of companies, they started investing in shock trading or exchange. 

The share market is open for stock brokers, sub-brokers, share transfer agent, portfolio manager, merchant bankers, foreign institutional investors, retail investors etc. But most of them may be involved in malicious activities and unfair trading practices in the stock market. 

Our Government of India enacted a law as SEBI Act to control unjust activities in the stock market. 

In this article, we are going to discuss the following Question, which are commonly asked- 

1.What is SEBI Act? 

2.How to file complaint to SEBI for fraud or for malicious activities? 

3.What are penalties for improper transactions in the share market? 

 

  

   1.What is SEBI Act? 

The SEBI is a non-statutory body established under SEBI Act in 1992 and was granted statutory powers on 30th January 1992.  

The regulatory body that, monitors the capital market and regulates its activities, keeping the check on companies and brokers, activities that violate the provisions of the SEBI Act,1992. 

SEBI protects the interests of investors and aim to provide investors with a safe and conducive investment atmosphere. 

This regulatory authority is the regulator of the Indian capital market. 

SEBI (Securities and Exchange Board of India)  

 The management members are as follows- 

1.Chairman by UNION of India 

2.Two members are from Union Financial Ministry of India, nominated by Central Government of India. 

3.One official member nominated by Reserve Bank of India. 

4.Five members are appointed for full time by Central Government of India. 

 

2.How to file complaint to SEBI for Fraud or for malicious activities? 

You need to visit the official link to lodge an online complaint with SEBI- www.scores.gov.in  

Documents Required for lodging a complaint online- 

1.copy of agreement 

2.Application form 

3.Bank account statement 

4.Contract notes 

5.Emails, Fax etc. 

After, Filing an online complaint. SEBI management initiates an inquiry or investigation into the complaint.  And in the investigation, SEBI has right to inspect the accounts and books of companies to find out the evidence of unfair practice. SEBI provides final decision or arbitration after inquiry and investigation. 

The time limit for online complaints is 3 years from the date of improper transaction. 

              

3. What are penalties for improper transactions in the share market? 

SEBI has a power to impose penalties for violation of the securities law. SEBI can suspend or restrain person from trading in this market. 

 SEBI imposes a fine of Rs 5 lakh extending up to Rs 25cr or 3 time of the profit made out of such illegal trade practices. 

These penalties are only for encouraging investors to trade shares and for monitoring or regulating the policies of SEBI Act. 

I hope, I have cover important questions in this regard. This will be useful for my readers. I will be back soon with an interesting legal topic. 

 So, I request you to stay tuned and follow me on Instagram and Twitter. 

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Tada...!