Further, in terms of Government Notification No.DL- (N)/04/0007/2003-15 dated 23rd March 2015, SAT hears and disposes of appeals against orders passed by the Insurance Regulatory Development Authority of India (IRDAI) under the Insurance Act, 1938, the General Insurance Business (Nationalization) Act, 1972 and the Insurance Regulatory and Development Authority Act, 1999 and the Rules and Regulations framed thereunder.
1. Presiding Officer
1. PRESIDING OFFICER
a. Earlier of the two
b. Earlier of the two
POWERS OF SAT:
The SAT shall have, for the purpose of discharging their functions under this Act, the same powers as are vested in a civil court under the code of civil procedure 1908 while trying a suit, in respect of the following matters namely
Appeal to SAT
Any person aggrieved
HOW TO APPEAR BEFORE SAT:
APPEAL AGAINST THE ORDER OF SAT
CIVIL COURT NOT TO HAVE JURISDICTION
PROCEDURE AND POWERS OF SECURITIES APPELLATE TRIBUNAL.
(1). The Securities Appellate Tribunal shall not be bound by the procedure laid down by the Code of Civil Procedure, 1908 (5 of 1908), but shall be guided by the principles of natural justice and, subject to the other provisions of this Act and of any rules, the Securities Appellate Tribunal shall have powers to regulate their own procedure including the places at which they shall have their sittings.
(2) The Securities Appellate Tribunal shall have, for the purpose of discharging their functions under this Act, the same powers as are vested in a civil court under the Code of Civil Procedure, 1908 (5 of 1908), while trying a suit, in respect of the following matters, namely :—
(3) Every proceeding before the Securities Appellate Tribunal shall be deemed to be a judicial proceeding within the meaning of sections 193 and 228, and for the purposes of section 196 of the Indian Penal Code (45 of 1860) and the Securities Appellate Tribunal shall be deemed to be a civil court for all the purposes of section 195 and Chapter XXVI of the Code of Criminal Procedure, 1973 (2 of 1974).
What have we understood?
The Securities and Exchange Board of India (SEBI) is responsible for protecting the interests of investors in
securities and to promote the development of, and to regulate the securities market and for all other connected matters. To protect and be responsive to the needs of three groups of people (issuer of securities, investors and market intermediaries), SEBI has been invested with three necessary functions rolled-in to enable it to carry out its mandate:
Since these powers make SEBI a very powerful body, an appeal process has been created to ensure accountability. For the quasi-judicial functions, there is a Securities Appellate Tribunal, which is a three-member tribunal. A second appeal lies directly to the Supreme Court.
The first SAT was formed in 1995, through a notification issued by the Central Government and therefore, is a statutory a body established under the provisions of Section 15K of the Securities and Exchange Board of India Act, 1992 to:
Exercise jurisdiction, powers and authority conferred on the Tribunal by or under this Act or any other law for the time being in force.
The Tribunal is a three-member body composed of a Presiding Officer and two other members who are to be nominated via a notification by the Central Government. The Union Government also reserves the right to notify as many SAT’s as is needed.
Procedure, 1908, but is be guided by the principles of natural justice and, subject to the other provisions of Depositories Act, 1996.
Every proceeding before the Securities Appellate Tribunal is deemed to be a judicial proceeding and the tribunal has all the powers of a Civil Court.
1. SEBI is a watchdog of the stock exchanges of India. SEBI has issued a new set of comprehensive guidelines governing the issue of shares and other financial instruments and has laid down detailed norms for stock- brokers and sub-brokers, merchant bankers, portfolio managers, and mutual funds.
2. With a view to regulating functions of stock exchanges in a country, the government passed the Securities Contracts (Regulation) Act in 1956. The act came into force in 1957.
3. SEBI started functioning as an independent regulator in 1988 when its’ first Chairman S A Dave who picked up six officers from IDBI and began functioning from IDBI’s office itself.
4. The total head-count of SEBI today exceeds more than 600. Recently SEBI completed 25 years in its service and celebrated silver jubilee festival. On the occasion of silver jubilee celebrations, Prime Minister Manmohan Singh stated that SEBI sought greater powers from government to rein in market manipulators and said dealing with errant entities that are financially strong and those collecting money illegally is one of the major challenges before it.
5. SEBI can also make a vital contribution to the revival of the economy and increase the investments towards the development of infrastructure facilities.
6. Till the early 1990s, the Indian secondary market comprised regional stock exchanges with the BSE heading the list. The Indian stock market was plagued with many limitations, such as the following.
Regulations for Intermediaries:
A broker is a member of a recognized stock exchange, who is permitted to do trades on the floor of the exchange. He is enrolled as a member with the concerned exchange and is registered with SEBI.
A sub-broker is a person who is registered with SEBI as such and is affiliated to a member of a recognized stock exchange.
The SEBI’s regulatory jurisdiction extends over companies listed on stock exchanges and companies intending to get their securities listed on any recognized stock exchange in the issuance of securities and transfer of securities, in addition to all intermediaries and persons associated with the securities market.
SEBI specify the matters to be disclosed and the standards of disclosure required for the protection of investors in respect of issues. It can issue directions to all intermediaries and other persons associated with the securities market with the interest of investors or of orderly development of the securities market. And it can conduct inquiries, audits, and inspection of all concerned and adjudicate offenses under the Act. Totally, it has been given the necessary autonomy and authority to regulate and develop an orderly securities market. All the intermediaries and persons associated with securities market, viz., brokers and sub-brokers, underwriters, merchant
bankers, bankers to the issue, share transfer agents and registrars to the issue, depositories, participants, portfolio managers, debentures trustees, foreign institutional investors, custodians, venture capital funds, mutual funds, collective investments schemes, credit rating agencies, etc., shall be registered with SEBI and shall be governed by the SEBI regulations pertaining to respective market intermediary.
Registration of stockbrokers are concerned a stockbroker applies in the prescribed format for grant of the certificate through the stock exchanges. The stock exchange forwards the application form to SEBI as early as possible not later than thirty days from the date of its receipt. SEBI takes into account for considering the grant of a certificate all matters relating to buying, selling, or dealing in securities and verifies that whether the stockbroker:
After verification of the applications of sub-brokers, the stock exchange certifies and grants a certificate to the sub-broker and sends intimation to the concern stock exchanges. SEBI has the power to suspend the registration of brokers if necessary, due to the problems caused violation of rules and regulations. A broker’s registration number begins with the letters “INB” and that of a sub-broker with the letters “INS”. The maximum brokerage can be charged by a broker is decided by the stock exchanges as per the exchange regulations.
The SEBI (Stockbrokers and Sub-brokers), 1992 stipulates that a sub-broker cannot charge from his clients a commission which is more than 1.5% of the value mentioned in the respective purchase or sale note.
The following fees are charged by a broker.
Control on Insider trading
SEBI also undertakes the important tasks like avoiding insider trading and increase transparency in trading to encourage small investors to invest in equities. Insider means any person who, is or was connected with the company or is deemed to have been connected with the company, and who is reasonably expected to have access to unpublished price sensitive information relating to securities of a company.
The insiders are people such as directors and officers or employees of the company or hold a position involving a professional or business relationship between themselves and the company whether temporary or permanent. Price sensitive information means any information which relates directly or indirectly to a company and which if published is likely to materially affect the price of securities of that company.
The price sensitive information includes periodical financial results of a company, intended declaration of dividends, Issue of securities or buy-back of securities, any major expansion, amalgamation, mergers and takeover plans, disposal of the whole or substantial part of the undertaking and any significant changes in policies, plans or operations of a company.
The government of India has established the supreme authority SEBI to monitor and control the proceedings of the capital market in the country. As a regulatory authority of capital markets, SEBI has been undertaking various tasks relating to the issue of shares, undertaking, intermediaries, trading of stocks and other merchant banking activities. And also it monitors the tasks of mutual funds. SEBI has additional powers and functions with reference to civil court procedure 1908 to regulate the capital market. In recent years, most of the small investors have been participating in trading activities of stocks and derivatives through exchanges because the investors believe that the SEBI is a watchdog of the stock exchanges of India and it always protects their interest and investments.
BAR OF JURISDICTION
No order passed by the Board [or the Adjudicating Officer] under SEBI Act shall be appealable and no civil court shall have jurisdiction in respect of any matter which the Board [or the Adjudicating Officer] is empowered by, or under, this Act to pass any order and no injunction shall be granted by any court or other authority in respect of any action taken or to be taken in pursuance of any order passed by the Board [or the Adjudicating Officer] by, or under, SEBI Act.
ESTABLISHMENT OF SPECIAL COURTS
1. The Central Government may, for the purpose of providing a speedy trial of offenses under this Act, by notification, establish or designate as many Special Courts as may be necessary.
2. A Special Court shall consist of a single judge who shall be appointed by the Central Government with the concurrence of the Chief Justice of the High Court within whose jurisdiction the judge to be appointed is working.
3. A person shall not be qualified for appointment as a judge of a Special Court unless he is, immediately before such appointment, holding the office of a Sessions Judge or an Additional Sessions Judge, as the case may be.
OFFENCES TRIABLE BY SPECIAL COURTS
Not withstanding anything contained in the Code of Criminal Procedure, 1973, all offenses under SEBI Act committed prior to the date of commencement of the Securities Laws (Amendment) Act, 2014 or on or after the date of such commencement, shall be taken cognizance of and tried by the Special Court established for the area in which the offense is committed or where there are more Special Courts than one for such area, by such one of them as may be specified in this behalf by the High Court concerned.
APPEAL AND REVISION
1. Save as otherwise provided in this Act, the provisions of the Code of Criminal Procedure, 1973 shall apply to the proceedings before a Special Court and for the purposes of the said provisions, the Special Court shall
be deemed to be a Court of Session and the person conducting prosecution before a Special Court shall be deemed to be a Public Prosecutor within the meaning of clause (u) of section 2 of the Code of Criminal Procedure, 1973.
2. The person conducting prosecution referred to in sub-section (1) should have been in practice as an advocate for not less than seven years or should have held a post, for a period of not less than seven years, under the Union or a State, requiring special knowledge of the law.
Any offense committed under SEBI Act, which is triable by a Special Court shall, until a Special Court is established, be taken cognizance of and tried by a Court of Session exercising jurisdiction over the area, notwithstanding anything contained in the Code of Criminal Procedure, 1973:
Provided that nothing contained in this section shall affect the powers of the High Court under section 407 of the Code of Criminal Procedure, 1973 to transfer any case or class of cases taken cognizance by a Court of Session under this section.