The Security Exchange Board of India primarily provides protection to the investor. It is the main regulator that controls the activities of the stock market and gives the security to the customers to trade fully with authority.
What Is SEBI
The Securities and Exchange Board of India is a regulatory body in the Stock Exchange and Commodity Market under the jurisdiction of the Ministry of Finance, Government of India.
Which works to secure investment and investors. It is the first regulatory body of the stock market that protects the client and the investor from illegal trading and fraud in the activities of the market.
SEBI is required to approve any company to be listed on the Indian Stock Exchange as SEBI plays an important role in every IPO Initial Public Offering.
So that every customer and the investors investing in that company are given the approval to launch the IPO only after complete information.
Why SEBI is important
By controlling the movements of the stock market, SEBI enhances its importance for every investor and company to trade according to the right guidelines.
As it is the only regulator that regulates the exchange of markets, the main character of SEBI is to identify the problems occurring in each company and punish those who have problems like insider trading.
For the initial listing of any company in the Indian stock market, companies are required to follow the SEBI guidelines in the initial public offering, only after which they can receive an application for the initial public offering. It is mandatory to follow the legal process to list the right companies.
SEBI always keeps an eye on each company and the trading done in its order to secure its investors in case of any type of illegal activity. it has the right to punish the person and the company for the insider trading done in it.
- It is necessary for companies to approve SEBI before investing in an IPO. If there is no approval from companies, then you should not invest.
- SEBI can penalize any unnecessary information or financial transactions and disturbances in the balance sheet of any company under its law activities or corporate auctions.
- Regarding the interest of investors, SEBI always encourages companies to do strict laws and fair trade, if the interests of investors are harmed due to internal affairs of the company, SEBI is free to intervene.