Securities and Exchange Board of India (SEBI)

What is SEBI?

SEBI stands for Securities and Exchange Board of India. Founded in 1992, SEBI is a regulatory body of India. It regulates the capital and securities market of India. It also ensures the protection of investors’ interests by formulating SOPs for the concerned entities. Its head office is in Mumbai. 

Structure of SEBI

The organizational structure of the SEBI comprises several departments. Each department has a unit head. At present, SEBI has more than 20 departments functioning under its name. A few of them include corporate finance, investment management, debt & hybrid securities, human resources, economic policy analysis, legal affairs, enforcement, etc. 

SEBI hierarchical structure consists of the following members:

  • Chairman – The Union Government of India nominates the chairman of SEBI.
  • Executive Officers – Union Finance Ministry appoints two executive officers to be a part of this structure.
  • Members – The RBI nominates one member while the Union Government of India nominates five members to join the organization. 

Functions of SEBI

The prime function of SEBI is to protect investors and traders’ interest in the securities market. In addition to regulation of the securities market, SEBI also makes necessary arrangements for the promotion and development of businesses. 

The body provides a platform to a range of securities market participants, including but not limited to stockbrokers, portfolio managers, share transfer agents, sub-brokers, merchant bankers, underwriters, trust deed trustees, and other concerned people for registration and regulation purposes.

Other functions of SEBI are as under; 

  • It regulates the operational process for depositories, custodians of securities, credit rating agencies, and foreign portfolio investors. 
  • It restricts securities inner trades, such as malpractices in the securities market.
  • It ensures that investors are well aware of the scope of work of securities markets intermediaries.
  • It monitors substantial shares acquisitions and company mergers.  
  • It monitors the research and development department ensuring an efficient securities market.

How to check if the broker is licensed by SEBI? 

It is essential to open an account with a trusted broker. However, the stock and derivatives market is full of good and bad brokers. You need to be careful while investing your hard-earned money. You can follow two methods to check if your broker is licensed by SEBI. 

  1. Find the broker’s company registration number on the official website of your broker and then search it on the SEBI website.
  2. Visit the SEBI website. Search for the name of your broker on the designated page.

SEBI Listed Brokers 

Listed below are a few most reliable brokers that I’ve handpicked for you. Rest assured that all of them are SEBI regulated. You can also check their registration status here

1) Zerodha 

Established in 2010, Zerodha is one of the most favorite stock brokers registered with SEBI in the currency derivatives segment. The broker is known for its cheap pricing models. The company is amongst the pioneers who paired conventional financial services with interweaving technology for the first time in India. The broker claims that the Indian stock and equity market witnessed a boom in equity and derivatives trading afterward. The firm offers low-cost trading plans altogether with multiple educational resources. Zerodha truly plays its part in empowering retail investors in India.

2) IIFL 

IIFL is the brand name of the IIFL Group. The head office of IIFL is in Mumbai. The company offers multiple tradable assets in the stock and derivatives market. It’s been more than two decades since the broker is rendering quality trading services to customers all across India. IIFL caters to the needs of both retail and institutional investors. With feasible pricing and a competitive product range, the company offers diversified trading opportunities, enabling clients to generate lucrative earnings. Since the broker is well regulated and fully authorized by the SEBI, you can rest assured of its legitimacy. IIFL has a quick account opening process. It also offers multiple payment methods making clients fund their accounts conveniently.  

3) Sharekhan

Sharekhan is one of the most trusted names in the stock market of India. The company is operating as a full-fledge stock and derivatives broker with a plan to enter a discount market in the foreseeable future. Founded in 2000, the broker is one of few brokers who pioneered the concept of online trading in India. The company offers a wide range of tradable financial instruments. The broker is a subsidiary of the European Bank – PNB Paribas. Being a SEBI regulated broker and having a large clientele base in India, it is undoubtedly a safe broker to trade stocks and derivatives. 

If you are looking to start your Forex trading in India, do check out the article.