SEBI plays an important role in the performing of stock market. It is the regulator of the securities market in India owned by the government of India. This exchange ensures that the transactions made in the stock market are in the best interest of the investors and promotes the growth and development of the securities market.
SEBI is basically a quasi-judicial body where it performs functions such regulating the market, investing when any issue arises and taking actions for the enforcement of the activity. SEBI is a very powerful authority as it plays an important role in determining the price at which the security can be traded through the market forces of demand and supply.
The SEBI was established on 12 April, 1992 in accordance with the provisions of the SEBI Act, 1992. Shri Ajay Tyagi is the chairman of SEBI since 01 March 2017.
Since we are all well aware of the impact of coronavirus has shaken up the financial markets in response to the tough government action to combat the pandemic. Due to the outbreak of coronavirus there was major fall in the stocks which lead SEBI to slap ban on the short selling in an attempt to stabilise the market maintain investor confident. In the midst of uncertainty in the market the investors are trapped in the sense of how to invest and in which security to invest as the market is at a high volatility. Since the main concern of the economy is for to stabilise the situation which would in turn lead to bringing relief to the market.
Even at this point of times there are various fluctuations going in the economy where SEBI is ensuring to curb this ban which from the past results prevents its relief from the market for a large period of time. SEBI making efforts to curb this high volatility amid the coronavirus pandemic has reduced volumes in the market. It is not the Indian regulator but the regulators in the global market took measures to prohibit short selling. If such a situation continues to prevail in the economy then SEBI will not lift the ban for short selling. Short selling is basically done through futures and options which hedges the risk of trading in securities for the investors.
SEBI has over the years established as a successful regulator in shifting the market from paper certificate to electronically conducting transaction with proper regularities under it. It ensures the exchange works in accordance with the laws and that any misconduct would lead to strict actions under the required Securities Appellate Tribunal. Thus, SEBI ensures that a smooth and proper functioning of stock market takes place for every investor and the requisite authority in performing a trading.