Vidhi Codex

The Securities and Exchange Board of India Act, 1992

The Securities and Exchange Board of India Act, 1992

Corporate199285 sections7 chapters

The Securities and Exchange Board of India Act of 1992 establishes the country's primary securities regulator to oversee the financial markets. It regulates stock exchanges, mutual funds, collective investment schemes, and key intermediaries like brokers, asset managers, and investment advisers. The law applies to public companies listing shares, market participants, and financial professionals. This legislation matters because it protects ordinary investors from fraudulent schemes, insider trading, and deceptive practices. By empowering the board to investigate violations, levy steep financial penalties, and resolve disputes, the Act ensures fair trading, builds public trust, and promotes the stable growth of India's capital markets.

Start reading →Read full ActSections

Chapter I PRELIMINARY →

  1. 1Short title, extent and commencement
  2. 2Definitions

Chapter II ESTABLISHMENT OF THE SECURITIES AND EXCHANGE BOARD OF INDIA →

  1. 3Establishment and incorporation of Board
  2. 4Management of the Board
  3. 5Term of office and conditions of service of Chairman and members of the Board
  4. 6Removal of member from office
  5. 7Meetings
  6. 7AMember not to participate in meetings in certain cases
  7. 8Vacancies, etc., not to invalidate proceedings of Board
  8. 9Officers and employees of the Board

Chapter III TRANSFER OF ASSETS, LIABILITIES, ETC., OF THE EXISTING SECURITIES AND EXCHANGE BOARD TO THE BOARD →

  1. 10Transfer of assets, liabilities, etc., of existing Securities and Exchange Board to the Board

Chapter IV POWERS AND FUNCTIONS OF THE BOARD →

  1. 11Functions of Board
  2. 11BPower to issue directions and levy penalty
  3. 11CInvestigation
  4. 11DCease and desist proceedings
  5. 11AACollective investment scheme

Chapter V REGISTRATION CERTIFICATE →

  1. 12Registration of stock-brokers, sub-brokers, share transfer agents, etc.
  2. 12AProhibition of manipulative and deceptive devices, insider trading and substantial acquisition of securities or control

Chapter VI FINANCE, ACCOUNTS AND AUDIT →

  1. 13Grants by the Central Government
  2. 14Fund
  3. 15Accounts and audit
  4. 15APenalty for failure to furnish information, return, etc.
  5. 15BPenalty for failure by any person to enter into agreement with clients
  6. 15CPenalty for failure to redress investors’ grievances
  7. 15DPenalty for certain defaults in case of mutual funds
  8. 15EPenalty for failure to observe rules and regulations by an asset management company.
  9. 15FPenalty for default in case of stock brokers.
  10. 15GPenalty for insider trading.
  11. 15HPenalty for non-disclosure of acquisition of shares and take-overs.
  12. 15JFactors to be taken into account while adjudging quantum of penalty
  13. 15KEstablishment of Securities Appellate Tribunal
  14. 15LComposition of Securities Appellate Tribunal
  15. 15MQualification for appointment as Presiding Officer, Judicial Member and Technical Member
  16. 15NTenure of office of Presiding Officer, Judicial or Technical Members of Securities Appellate Tribunal
  17. 15PFilling up of vacancies
  18. 15QResignation and removal
  19. 15ROrders constituting Appellate Tribunal to be final and not to invalidate its proceedings
  20. 15SStaff of the Securities Appellate Tribunal
  21. 15TAppeal to the Securities Appellate Tribunal
  22. 15UProcedure and powers of the Securities Appellate Tribunal
  23. 15VRight to legal representation
  24. 15XPresiding Officer, Members and staff of Securities Appellate tribunal to be public servants
  25. 15YCivil Court not to have jurisdiction
  26. 15ZAppeal to Supreme Court
  27. 15EAPenalty for default in case of alternative investment funds, infrastructure investment trusts and real estate investment trusts.
  28. 15EBPenalty for default in case of investment adviser and research analyst.
  29. 15HAPenalty for fraudulent and unfair trade practices.
  30. 15HBPenalty for contravention where no separate penalty has been provided
  31. 15JACrediting sums realised by way of penalties to Consolidated Fund of India
  32. 15JBSettlement of administrative and civil proceedings
  33. 15MAAmendment of Presiding Officer and Judicial Members
  34. 15MBSearch-cum-Selection Committee for appointment of Technical Members
  35. 15MCVacancy not to invalidate selection proceeding
  36. 15PAMember to act as Presiding Officer in certain circumstances
  37. 15HAAPenalty for alteration, destruction, etc., of records and failure to protect the electronic database of Board.

Chapter VII MISCELLANEOUS →

  1. 16Power to Central Government to issue directions
  2. 17Power of Central Government to supersede the Board
  3. 18Returns and reports
  4. 19Delegation
  5. 20Appeals
  6. 20ABar of jurisdiction
  7. 21Savings
  8. 22Members, officers and employees of the Board to be public servants
  9. 23Protection of action taken in good faith
  10. 24Offences
  11. 24AComposition of certain offences
  12. 24BPower to grant immunity
  13. 25Exemption from tax on wealth and income
  14. 26Cognizance of offences by courts
  15. 26BOffences triable by Special Courts
  16. 26CAppeal and revision
  17. 26DApplication of Code to proceedings before Special Court
  18. 26ETransitional provisions
  19. 27Contravention by companies
  20. 28ARecovery of amounts
  21. 28BContinuance of proceedings
  22. 28CPowers of Board not to apply to International Financial Services Centre
  23. 29Power to make rules
  24. 30Power to make regulations
  25. 31Rules and regulations to be laid before Parliament
  26. 32Application of other laws not barred
  27. 34Power to remove difficulties
  28. 34AValidation of certain acts
  29. 35Repeal and saving

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