SEBI Act, Rules, Jurisdiction, Legal Aspects | Advocate Paresh M Modi | 9925002031 | Gujarat SEBI Lawyers
1. Introduction to SEBI (Securities and Exchange Board of India)
The Securities and Exchange Board of India (SEBI) is the primary regulatory authority for the securities market in India. It was established under the SEBI Act, 1992, to protect investor interests, promote fair trade practices, and regulate securities markets and intermediaries.
2. Jurisdiction and SEBI Tribunal Details
SEBI has the authority to regulate stock exchanges, brokers, investment advisors, mutual funds, portfolio managers, and listed companies. The SEBI Appellate Tribunal (SAT) handles disputes against SEBI orders.
SEBI Headquarters and Offices
- SEBI Head Office:
- Address: SEBI Bhavan, Plot No. C4-A, ‘G’ Block, Bandra Kurla Complex, Bandra (East), Mumbai – 400051, Maharashtra, India.
- Website: www.sebi.gov.in
- Helpline: 022-26449000 / 40459000
- Regional Offices:
- Western Regional Office (Ahmedabad): Unit No. 002, Ground Floor, SAKAR I, Near Gandhigram Railway Station, Ashram Road, Ahmedabad – 380009, Gujarat.
- Eastern Regional Office (Kolkata): L&T Chambers, 3rd Floor, 16 Camac Street, Kolkata – 700017, West Bengal.
- Southern Regional Office (Chennai): Overseas Towers, 7th Floor, 756-L, Anna Salai, Chennai – 600002, Tamil Nadu.
- Northern Regional Office (Delhi): Bank of Baroda Building, 5th Floor, 16 Sansad Marg, New Delhi – 110001.
3. SEBI Rules and Regulations
SEBI regulates the securities market through various acts and regulations, including:
- SEBI Act, 1992 – The foundational law governing SEBI’s authority.
- Securities Contracts (Regulation) Act, 1956 – Governs stock exchanges.
- Insider Trading Regulations, 2015 – Regulates insider trading.
- Prohibition of Fraudulent and Unfair Trade Practices Regulations, 2003 – Prevents stock market fraud.
- SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 – Ensures transparency of listed companies.
- Mutual Funds Regulations, 1996 – Regulates mutual funds.
4. SEBI License Terms & Conditions
Entities regulated by SEBI must obtain a license, including stockbrokers, mutual fund houses, investment advisors, and merchant bankers.
- Requirements for obtaining a SEBI license:
- Compliance with KYC (Know Your Customer) norms.
- Adherence to SEBI regulations.
- Financial soundness and minimum capital requirements.
5. SEBI Offences and Violations
Common SEBI Violations:
- Insider Trading (SEBI (PIT) Regulations, 2015).
- Market Manipulation & Price Rigging.
- Fraudulent Stock Tips & Misleading Investment Advice.
- Non-Disclosure of Financial Statements by Listed Companies.
- Unregistered Investment Advisory Services.
Penalties under SEBI Act
Violations of SEBI regulations may attract penalties under Section 11B and Section 15 of the SEBI Act, which include:
- Fines ranging from ₹1 lakh to ₹25 crores
- Imprisonment up to 10 years for insider trading cases
- Disgorgement of unlawful gains
6. Defence Strategies for Accused Persons in SEBI Cases
- Lack of Intent: Demonstrating that there was no fraudulent intent.
- No Insider Knowledge: If accused of insider trading, proving that no unpublished price-sensitive information (UPSI) was used.
- Technical Grounds: Challenging procedural lapses in SEBI investigations.
- Absence of Direct Involvement: Proving that the accused was not the primary decision-maker.
7. Legal Aspects of Providing Share Market Tips
- Only SEBI-registered advisors can provide investment tips.
- Unregistered advisory services are punishable under SEBI (Investment Advisers) Regulations, 2013.
- Violators can be fined ₹1 lakh to ₹1 crore and face a ban from the securities market.
8. Insider Trading: Offences and Defences
Types of Insider Trading Offences
- Trading based on Unpublished Price-Sensitive Information (UPSI).
- Tipping Off Others with Insider Information.
- Trading by Relatives or Close Associates of Insiders.
- Attempt to Manipulate Market with Leaked Information.
Defences against Insider Trading Accusations
- No Possession of UPSI at the Time of Trading.
- Pre-Approved Trading Plan as per SEBI Regulations.
- Information was Publicly Available.
- Trading Done Under Independent Advice.
9. Top 10 Common SEBI Questions and Answers
General SEBI Compliance
- What is SEBI and what is its role?
- SEBI is a regulatory body that governs stock markets and protects investors.
- Who needs SEBI registration?
- Stockbrokers, investment advisors, portfolio managers, mutual funds, etc.
- How can I file a complaint with SEBI?
- Through the SCORES portal (SEBI Complaint Redress System).
- What are the penalties for insider trading?
- Fines up to ₹25 crores or three times the profit made, and imprisonment up to 10 years.
- Can SEBI ban a company?
- Yes, SEBI can ban a company for fraud or regulatory violations.
- What is an IPO scam?
- Manipulation of Initial Public Offerings to deceive investors.
- Is investing in unregistered schemes illegal?
- Yes, investing in unregistered schemes can be penalized under SEBI laws.
- What is market manipulation?
- Creating artificial demand/supply to influence stock prices.
- How does SEBI regulate mutual funds?
- Through SEBI (Mutual Funds) Regulations, 1996.
- What is front-running in stock trading?
- A broker trades based on non-public information about client orders.
(Complete list of 35 questions and detailed answers is included on the website.)
10. Conclusion and Legal Assistance
For expert legal representation in SEBI cases, contact Advocate Paresh M Modi, one of the best SEBI lawyers in Gujarat.
📞 Mobile (WhatsApp Only): +91 9925002031
📞 Office Landline: +91-79-48001468
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