2.04: THE SECURITIES & EXCHANGE BOARD OF INDIA [SEBI]:

The great Indian Scam which took place in the year 1991-92, credit for which goes to one Mr. Harshad Mehta, a broker on the Bombay Stock Exchange, prompted the Government of India to enact the Securities and Exchange Board of India Act, 1992. The SEBI was in fact set up by the Indian Government in the year 1988. However, its power to regulate the securities markets was limited until the SEBI Act, 1992 was enacted. Though autonomous in principle, SEBI is not independent of the Central Government. Under the SEBI Act, the SEBI's Board is set up, composition of which is:

(a) A Chairman,
(b) Two members from amongst the officials of the Ministries of the Central Government dealing with finance and law,
(c) One member from amongst the officials of the RBI, and
(d) Two other members to be appointed by the Central Government who shall be   professionals and have experience or special knowledge relating to the securities markets.

SEBI has its head office in Mumbai and its three regional offices in New Delhi, Calcutta and Chennai. Each regional office is set up to carry out inter alia the duty of over seeing the Stock Exchange and their brokers and attend to the complaints against them, to accept offer documents of new issues of Rs.200 million or less and to accept applications for the registration of Merchant Bankers in Categories II, III and IV. Currently SEBI consists of the following departments:

(a) The Primary Market Department
(b) The Secondary Market Department
(c) The Institutional Investors, the Mergers and Requisitions, Research and Public          Department (IIMARP Department)
(d) The Legal Department and
(e) The Investigation Department

The registration of FII's is dealt with by the IIMARP Department.