securities and exchange board of india was responsible for regulation of capital market before sebi.
securities and exchange board of india was responsible for regulation of capital market before sebi.
who is responsible for regulation of capital market before sebi?
securities and exchange board of india
controller of capital issues was the regulatory authority before sebi came into existence; it derived authority from the capital issues (control) act, 1947.









































initially sebi was a non statutory body without any statutory power. however, in 1992, the sebi was given additional statutory power by the government of india through an amendment to the securities and exchange board of india act, 1992. in april 1988 the sebi was constituted as the regulator of capital markets in india under a resolution of the government of india. the sebi is managed by its members, which consists of following:
securities and exchange board of india
in november 2015, the whistle-blower’s letter referred to sebi’s technical advisory committee (tac) report that concluded in march 2016, that nse systems were prone to 'manipulation' and thus recommended an investigation. this was when sebi directed the new nse board to conduct a forensic audit of its systems and deposit revenue from co-location trading in an escrow account. this was a blow to nse’s plans of going public as the co-location server facility stream accounted for nearly 35–40 per cent of the nse’s core revenues. the nse added public interest directors to its board. they include: ashok chawla, former finance secretary; naved masood, former secretary in the ministry of corporate affairs; tv mohandas pai, chairman of manipal global education services; dinesh kanabar, former deputy ceo of kpmg in india, and dharmishta raval, former sebi executive director. the board then appointed deloitte to conduct a forensic inquiry. the deloitte report, submitted to sebi on 23 december 2016, found that the exchange's tick-by-tick (tbt) system was prone to manipulation and restated the findings by the sebi panel that some stock brokers obtained preferential access to servers. the nse also admitted this in its draft prospectus. in a written reply, minister of state for finance, arjun meghwal told the lok sabha in 2016: "the architecture of nse with respect to dissemination of tick-by-tick through transmission control protocol (tcp) or internet protocol (ip) was prone to manipulation or market abuse. and this system has been discontinued by nse from 3 december 2016." sebi’s action was to nudge the nse into conducting investigations by two big global consulting firms, deloitte and ernst & young, despite the fact that both had a potential conflict of interest, having handled major projects or consulting assignments for the bourse. ravi narain, as md and ceo of the nse, was also the head of the sub-committee which chose deloitte for the forensic audit of nse, despite being fully aware that deloitte was working on a large project for nse’s disaster recovery centre (drc). this was a clear case of conflict of interest. in july 2018, sebi issued a second show cause notice to the nse, many of its former and existing executives, and senior officials alleged to have violated the sebi act, securities contracts (regulation) act, 1956 and prohibition of fraudulent and unfair trade practices and broker regulations. the notice comes even as the cbi has booked brokers and unidentified officials at the nse and sebi for preferential access through the co-location service. in august 2018, the madras high court issued notice to sebi seeking appropriate action against nse employees for the alleged fraud in co-location services and directed sebi to file its response. after nse launched its tbt in co-location, bse sent a note to sebi emphasising the need for a fair regulatory framework. however, sebi ignored it.
nse co-location scam