The Securities and Exchange Board of India (SEBI) is the regulator of India's securities markets. It writes the rules for stock exchanges, brokers, mutual funds, listed companies and other market participants, and enforces them to protect investors and keep markets fair.
What SEBI is
SEBI was set up in 1988 and given statutory powers in 1992 through the SEBI Act, after a period when India's markets needed stronger, independent oversight. It is headquartered in Mumbai. Its purpose, as set out in law, is to protect the interests of investors, promote the development of the securities market and regulate it.
How it works in India
SEBI regulates a wide range of entities: the stock exchanges (such as NSE and BSE), depositories (NSDL and CDSL), stock brokers, mutual funds, portfolio managers, investment advisers and research analysts, credit rating agencies and foreign portfolio investors. It also sets the rules for companies that want to list, including the documents they must file for an IPO, and the disclosures they must make once listed.
SEBI can investigate wrongdoing such as insider trading, price manipulation or misleading disclosures. It can impose penalties, ban people or entities from the market, and order the return of illegal gains. Its orders can be appealed to the Securities Appellate Tribunal.
A simple example
A company plans an IPO. It must file a draft offer document with SEBI describing its business, finances and risks. SEBI reviews it and may ask for changes. After listing, the company must report results and important events promptly. If it later emerges that insiders traded on secret information, SEBI can investigate and take action.
Why it matters for investors
SEBI's rules give investors transparency, protection of their money and shares, and a route to complaints and redress. Knowing what SEBI does also helps you check whether an adviser, broker or scheme is legitimate.
How investors can use SEBI
Investors can check on SEBI's website whether an adviser, broker or other intermediary is registered. If you have a complaint against a broker, listed company or other intermediary that is not resolved, you can file it on SCORES, SEBI's online complaint system, and newer online dispute resolution mechanisms also exist. SEBI also runs investor awareness programmes and publishes warnings about common frauds.
SEBI's structure
SEBI is led by a chairperson and a board that includes whole-time members and representatives of relevant government bodies. It works through departments covering areas such as markets, corporate finance, investment management, enforcement and investor protection, and has regional offices across India. It issues regulations, circulars and guidelines, and publishes its orders, so investors and market participants can see how rules are applied in practice.
Example on PositoAI: regulatory red flags on Indian companies
SEBI's enforcement orders are public, and PositoAI shows serious ones as red flags on company pages. As on 19 Oct 2026, 15 Indian companies on PositoAI carried an active red flag from a SEBI enforcement order (21 flags in all, since some companies have more than one).
For context, other active warnings on Indian companies included a high promoter pledge (65 companies) and an exchange indicator of insolvency proceedings (16 companies). In total, 129 of the 2,126 Indian companies on PositoAI had at least one active red flag, about 6%. A red flag is a prompt to read the details, not a verdict on the company. (Figures as on 19 Oct 2026.)
Common misconceptions
"SEBI guarantees my investments." It regulates markets; it does not guarantee returns or protect against normal market losses.
"Anyone giving stock tips is regulated." Only registered advisers and research analysts are; many tip providers on social media are not.
"SEBI regulates banks." Banks are regulated by the Reserve Bank of India.
Frequently asked questions
When was SEBI established?
In 1988, with statutory powers from 1992.
How do I complain to SEBI?
Through its SCORES portal, after first raising the issue with the intermediary.
Can SEBI ban a company or person?
Yes, it can bar entities from the securities market.
Who regulates commodities trading?
SEBI also regulates commodity derivatives markets.
How to use this on PositoAI
PositoAI tracks serious regulatory actions, including SEBI orders, and shows them as red flags on company pages. See our guide on red flags, and remember that PositoAI itself is a research tool, not a SEBI-registered adviser. All current flags are listed on the Red flags page. PosiStep 17 of PosiCourse, PositoAI's free stock market course, explains red flags and warning signs.
Summary
SEBI is India's securities market regulator, set up in 1988 and given statutory powers in 1992. It regulates exchanges, brokers, mutual funds, advisers and listed companies, investigates wrongdoing and protects investors. Use SEBI's website to verify intermediaries and SCORES to file complaints, but remember it does not guarantee returns.