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What provisions are there in SEBI regulations to protect the interest of investors.

What provisions are there in SEBI regulations to protect the interest of investors.

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1 Answer

The Primary function of Securities and Exchange Board of India under the SEBI Act, 1992 is the protection of the investors interest and the healthy development of Indian financial markets. SEBI had issued guidelines for the protection of the investors , through the Securities and Exchange Board of India (Disclosure and Investor Protection) Guidelines, 2000. These Guidelines have been issued by the Securities and Exchange Board of India under Section 11 of the Securities and Exchange Board of India Act, 1992. In the interest of the investors, SEBI regulations offer following guidelines:

  • Eligibility Norms For Companies Issuing Securities: Provisions regarding this are enshrined in Chapter-II of the said guidelines.
  • Pricing By Companies Issuing Securities: These provisions are being dealt in the Chapter-III of the guidelines.
  • Pre-Issue Obligations: The pre issue obligations are provided in Chapter-V.
  • Contents of Offer Document: In addition to the disclosures specified in Schedule II of the Companies Act, 1956, the prospectus shall also contain all material information which shall be true and adequate so as to enable the investors to make informed decision on the investments in the issue. The prospectus shall also contain the information and statements specified in this chapter and shall as far as possible follow the order in which the requirements are listed in this chapter and summarized in Schedule VIIA.
  • Consequence of Non-Observance of The Guidelines: SEBI in case of non-observance of these guidelines (Section 11B) as it seems to be a bar from doing such things which may prejudice the interest of the investors the board.
  • Future Overcast Of The Investors: SEBI being a premiere institution for dealing with the problems relating to securities has advanced a long way towards protecting the investors from the hazards of the predators existing in the market.

February 12, 2019
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