Chapter 6Intermediate~8 min

Who regulates the market?

SEBI's role as market regulator.

Markets need someone to enforce the rules and protect participants who know less than others. In India that job belongs to the Securities and Exchange Board of India, known as SEBI.

SEBI is the regulator for India's securities market — the market for shares, bonds, mutual funds and similar instruments. It is a statutory body, meaning its powers come from law, not from the exchanges themselves.

What SEBI does

  • Protects investors — for example, by requiring clear disclosure from companies.
  • Regulates intermediaries — brokers, exchanges, depositories and others must meet standards and be registered.
  • Sets conduct rules — including prohibitions on insider trading and market manipulation.
  • Oversees disclosure — listed companies must report financial results and important events on time.
'Insider trading' is trading on important information that is not yet public. It is prohibited because it lets a few people profit at the expense of everyone else.

Fictional example: if rumours spread that Nimbus Technologies Ltd has won a large contract, SEBI's rules require the company to disclose material news in a timely and equal way, so that all investors learn it at the same time.

Who does what in the Indian market

A simple map of the institutions that make trading possible.

SEBI — the regulator

The Securities and Exchange Board of India oversees the whole market: exchanges, brokers, intermediaries and listed companies. It exists chiefly to protect investors and keep markets fair.

This is a simplified map for learning. Each layer has detailed rules and responsibilities that go well beyond what is shown here.
See SEBI sitting above the exchanges and intermediaries it regulates.
SEBI's role is to protect the integrity and fairness of the market. It does not tell investors what to buy, and it does not guarantee that any investment will make money.

Key takeaways

  • SEBI (Securities and Exchange Board of India) is India's securities-market regulator.
  • It protects investors and regulates exchanges, brokers and other intermediaries.
  • It prohibits practices like insider trading and market manipulation.
  • Regulation supports fair markets; it does not eliminate risk or guarantee returns.

Check your understanding

Every answer comes with an explanation — the goal is understanding, not a score.

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What is SEBI?

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