(1) Powers relating to stock exchanges and intermediaries: SEBI has wide powers
regarding the stock exchanges and intermediaries dealing in securities. It can ask
information from the stock exchanges and intermediaries regarding their business
transactions for inspection/scrutiny and other purposes.
(2) Powers relating to monetary penalties: SEBI’ has been empowered to impose
monetary penalties on capital market intermediaries and other participants for a
range of violations. It can even impose suspension of their registration for a short
(3) Powers to initiate actions relating to functions assigned: SEBI has a power to
initiate actions in regard to functions assigned. For example, it can issue guidelines to
different intermediaries or can introduce specific rules for the protection of interests of
(4) Powers relating to insider trading: SEBI has power to regulate insider trading or
can regulate the functions of merchant bankers.
(5) Powers under Securities Contracts (Regulation) Act : For effective regulation of
stock exchanges, the Ministry of Finance issued a Notification on 13 September,
1994 delegating several of its powers under the Securities Contracts (Regulation) Act
to SEBI. SEBI is also empowered by the Finance Ministry to nominate three
members on the Governing Body of every stock exchange instead of earlier practice
of government making such nominations.
(6) Powers to regulate business of stock exchanges : SEBI is empowered to regulate
the business of stock exchanges, intermediaries associated with the securities
market as well as mutual funds, fraudulent and unfair trade practices relating to
securities and regulation of acquisition of shares and takeovers of companies.

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