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The Securities and Exchange Board of India (SEBI) was established in:
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Answer: Option B — 1988
Detailed Solution
The Securities and Exchange Board of India (SEBI) was first set up on 12 April 1988 as a non-statutory body by a resolution of the Government of India. At that time, it had no legal powers to enforce its decisions.
After the securities scam of 1992, involving the stockbroker Harshad Mehta, who illegally used funds from banks to manipulate share prices, the need for a strong regulator became clear. Parliament passed the SEBI Act, 1992, which gave SEBI statutory status and powers on 30 January 1992. SEBI's headquarters is in Mumbai, at the Bandra Kurla Complex.
The main objectives of SEBI, as stated in the SEBI Act, are to:
- Protect the interests of investors in securities.
- Promote the development of the securities market.
- Regulate the securities market.
SEBI regulates stock exchanges (such as the BSE and the NSE), stockbrokers, merchant bankers, mutual funds, portfolio managers, credit rating agencies, foreign portfolio investors and listed companies. It frames rules for public issues (IPOs), insider trading, takeovers and disclosure. It has quasi-legislative, quasi-executive and quasi-judicial powers: it makes regulations, conducts investigations and passes orders. Appeals against SEBI's orders go to the Securities Appellate Tribunal (SAT).
SEBI consists of a Chairman and other members, appointed by the Central Government. Madhabi Puri Buch (2022-25) was the first woman Chairperson of SEBI; Tuhin Kanta Pandey took over in March 2025.
Other financial regulators include the RBI (banking), IRDAI (insurance, 1999) and PFRDA (pensions, 2003).
Why not the other options?
- ✗1992 is the year SEBI got statutory powers through the SEBI Act.
- ✗1991 is the year of the economic reforms.
- ✗1995 is the year the WTO was set up.
Quick tip
Remember: SEBI = set up 12 April 1988 (non-statutory), statutory under the SEBI Act 1992 after the Harshad Mehta scam; headquarters Mumbai; appeals go to SAT.
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Financial Markets & Institutions — Preparation
This question tests your understanding of Financial Markets & Institutions, a key topic in the General Knowledge section. The detailed solution above uses a step-by-step approach to show the reasoning, and where available, a shortcut that helps you solve similar questions in under 90 seconds during the actual exam.
This topic covers India's financial institutions and markets: regulators such as SEBI, IRDAI and PFRDA, development banks such as NABARD, SIDBI and EXIM Bank, the money market and capital market, stock exchanges and indices, insurance, and microfinance and self-help groups. Questions usually ask what each regulator oversees, where institutions are headquartered, and what market terms mean (bull and bear markets, IPO, Sensex and Nifty). For example, NABARD supports agriculture and rural development, SIDBI supports small industries, and SEBI regulates the securities market. Practise the financial markets and institutions questions below, written in the style of the general awareness sections of exams such as SSC, banking, railways, CUET GAT, MAH CET and CLAT. Each question comes with a detailed explanation that adds related facts, so every question helps you revise more than one point.