Introduction Of Securities and Exchange Board of India :
Before 1992, the three principal Acts governing the securities markets were:
(a) the Capital Issues (Control) Act, 1947, which restricted issuer’s access to the securities market and controlled
the pricing of issues; (b) the Companies Act, 1956, which sets out the code of conduct for the corporate sector
in relation to issue, allotment and transfer of securities, and disclosures to be made in public issues; and (c) the
Securities Contracts (Regulation) Act, 1956, which provides for regulation of transactions in securities through
control over stock exchanges. The Capital Issues (Control) Act, 1947 had its origin during the war in 1943 when
the objective was to channel resources to support the war effort. The Act was retained with some modifications
as a means of controlling the raising of capital by companies and to ensure that national resources were channelled into proper lines, i.e., for desirable purposes to serve goals and priorities of the government, and to protect the interests of investors. Under the Act, any firm wishing to issue securities had to obtain approval from the Central Government, which also determined the amount, type and price of the issue.
Major part of the liberalisation process was the repeal of the Capital Issues (Control) Act, 1947 in May 1992. With this, Government’s control over issue of capital, pricing of the issues, fixing of premia and rates of interest on
debentures etc. ceased. The office which administered the Act was abolished and the market was allowed to
allocate resources to competing uses. However to ensure effective regulation of the market, SEBI Act, 1992 was enacted to empower SEBI with statutory powers for (a) protecting the interests of investors in securities, (b) promoting the development of the securities market, and (c) regulating the securities market. Its regulatory jurisdiction extends over corporates in the issuance of capital and transfer of securities, in addition to all intermediaries and persons associated with securities market. SEBI can specify the matters to be disclosed and the standards of disclosure required for the protection of investors in respect of issues; can issue directions to all intermediaries and other persons associated with the securities market in the interest of investors or of orderly development for securities market; and can conduct enquiries, audits and inspection of all concerned and adjudicate offences under the Act. In short, it has been given necessary autonomy and authority to regulate and develop an orderly securities market.