SEBI Act, 1992: Structure, Powers, Penalties, SAT and Market Intermediaries (+ Quiz)

This is part 1 of our SEBI regulations series. It covers the law that created SEBI, how SEBI is run, its powers and the appeal system. For the basics of markets and products, read our capital market basics first.

SEBI at a glance

FactDetail
Set up12 April 1988 (non-statutory, by a government resolution)
Statutory body from30 January 1992 (ordinance), under the SEBI Act, 1992
Preamble aimsProtect investors, develop and regulate the securities market
HeadquartersMumbai (SEBI Bhavan, Bandra Kurla Complex)
ChairpersonTuhin Kanta Pandey (11th, since 1 March 2025)
Merged with SEBIForward Markets Commission (FMC) in September 2015
Earlier regulatorController of Capital Issues (CCI) under the Capital Issues (Control) Act, 1947 (repealed 1992)

Composition of the SEBI Board (Section 4)

MemberNumber
Chairman (appointed by the Central Government)1
Officials of the Ministry of Finance (and Corporate Affairs)2
Official of the RBI1
Other members (at least 3 whole-time)5
Total9

Important sections of the SEBI Act

SectionSubject
3Establishment of SEBI
4Management of the Board
11Functions of SEBI: regulate exchanges, intermediaries, mutual funds; prohibit fraud and insider trading; investor education
11AMatters to be disclosed by companies
11BPower to issue directions (including disgorgement)
11CInvestigation
12Registration of intermediaries (brokers, merchant bankers, etc.)
12AProhibition of manipulative devices, insider trading and substantial acquisition
15A–15HBPenalties (adjudication by an Adjudicating Officer)
15JBSettlement of administrative and civil proceedings
15KEstablishment of the Securities Appellate Tribunal (SAT)
15TAppeal to SAT (within 45 days)
15ZAppeal to the Supreme Court (within 60 days) from SAT’s order
24Offences: imprisonment up to 10 years and/or fine up to ₹25 crore
26Cognizance of offences by a Special Court

Securities Appellate Tribunal (SAT)

PointDetail
Set up1995, under Section 15K
LocationMumbai
Hears appeals againstSEBI, IRDAI and PFRDA orders
Presiding OfficerA sitting or retired Supreme Court judge or High Court Chief Justice (or judge, approx)
Further appealSupreme Court

Other securities market laws

LawKey point
Securities Contracts (Regulation) Act, 1956 (SCRA)Regulates stock exchanges and contracts; SCRR, 1957 sets public shareholding rules
Depositories Act, 1996NSDL and CDSL; demat holdings
Companies Act, 2013Public issues of companies (along with SEBI rules)
Prevention of Money Laundering Act, 2002KYC and reporting by intermediaries
FEMA, 1999Foreign investment limits (with RBI)

Regulated entities (intermediaries)

IntermediarySEBI regulations
Stock brokersStock Brokers Regulations, 2022
Merchant bankersMerchant Bankers Regulations, 1992 (overhauled in 2024–25)
Depository participantsDepositories and Participants Regulations, 2018
Investment advisers (IA)IA Regulations, 2013
Research analysts (RA)RA Regulations, 2014
Credit rating agenciesCRA Regulations, 1999
Portfolio managersNew PMS Regulations, 2026 (replacing 2020)
Mutual fundsMF Regulations, 1996
Alternative investment fundsAIF Regulations, 2012
REITs / InvITsREIT and InvIT Regulations, 2014
Foreign portfolio investorsFPI Regulations, 2019
Market infrastructure institutions (MIIs)Stock exchanges, clearing corporations, depositories

Investor protection tools

ToolPurpose
SCORESSEBI’s online complaint system (SCORES 2.0 from April 2024)
ODR platformOnline Dispute Resolution for investor–intermediary disputes (2023)
Investor Protection and Education Fund (IPEF)Funds investor awareness
SEBI Saa₹thiInvestor education mobile app
Settlement Regulations, 2026New formula-based settlement framework (approved September 2026; replaces 2018 rules)

Exam-ready one-liners

  1. SEBI was set up on 12 April 1988 and became statutory on 30 January 1992.
  2. The SEBI Board has 9 members, including one RBI official.
  3. Section 11 lists SEBI’s functions; Section 12 deals with registration of intermediaries.
  4. Appeals against SEBI orders go to SAT (Mumbai) within 45 days, then to the Supreme Court within 60 days.
  5. SAT also hears appeals against IRDAI and PFRDA.
  6. Offences under the SEBI Act: up to 10 years’ jail and/or ₹25 crore fine.
  7. FMC merged with SEBI in 2015.
  8. SEBI’s new Settlement Regulations and PMS Regulations were approved in September 2026.

Related reading

Quiz: test yourself

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Based on the SEBI Act, 1992 and SEBI regulations as reported. Check sebi.gov.in for the latest text.

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