This article is written by Ramanuj Mukherjee, CEO, and Kashish Khattar, Team LawSikho.
Hello,
Today, I am going to tell you about a career with the securities watchdog of India, SEBI.
The Securities and Exchange Board of India was established through a statute: the Securities and Exchange Board of India Act of 1992.
SEBI is the regulator of securities and commodities market and is owned by the Government of India. Further, SEBI was established in April of 1992.
The basic objectives of such a board in India are to protect the interests of the investors in securities; promote the development of securities market; and regulate the securities market.
It has its headquarters in the posh Bandra Kurla Complex of Mumbai. It has 1 regional office each in New Delhi, Kolkata, Ahmedabad and Chennai. It has 17 local offices as well. However, the bulk of the SEBI officers function out of Mumbai, while a considerable number are posted in Delhi as well.
Why is SEBI very important to India? For that, we need to understand why our stock exchanges and capital markets are so critical for economic growth and prosperity.
In a way, the capital market is the backbone of the economy.
Our economy cannot grow without capital, and the capital market makes it possible to raise capital and create a transparent market for ownership of large businesses.
Trading stock on a public exchange is essential for economic growth as it allows companies to raise capital through public funding, pay off debts or expand the business. Also, it gives us a fair and transparent way to value large businesses, determined by demand and supply in an open marketplace.
The capital market exists for two main reasons, the first is to provide a company with the opportunity to raise capital that can be used to expand and grow the business.
If a company issues ten million shares in an IPO or QIP that can sell at Rs. 50 a share, this allows them to raise Rs. 50 crore for the business. Companies find it better to raise capital this way so they can avoid incurring debt and paying steep interest charges. Also, in this case, the risk on the capital is borne by shareholders, and not by promoters personally or by banks.
The capital markets provide investors with the opportunity to earn a share in the company’s profits and a free and fair market where they can offload their shares when they need to exit their investments.
As a result, far too much money passes through the capital market every day. There is a huge incentive to manipulate the stock exchange or step out of the line. A strong and effective regulator is needed to keep the capital markets running well.
Who does that work? Yes, it is SEBI.
What is the role of SEBI in the market?
SEBI’s stated objective is “to protect the interests of investors in securities and to promote the development of and to regulate the securities market and for matters connected therewith or incidental thereto.”
Different departments in SEBI
These are the major departments that SEBI consist of:
- Foreign Portfolio Investors and Custodians
- Human Resources Department
- Information Technology
- Investment Management Department
- Office of International Affairs
- Commodity and Derivative Market Regulation Department
- National Institute of Securities Market
Management of SEBI
The management of SEBI consists of a Board of Directors who are appointed as follows:
- 1 chairman nominated by the Union Government of India
- 2 members from the Union Finance Ministry of India
- 1 member from the Reserve Bank of India (RBI)
- 5 members nominated by the Union Government of India
While the central government can influence SEBI a great deal, traditionally, this regulator has worked very independently, unaffected by any politics given the strategically critical nature of its functions to grow and protect the economy.
Functions of SEBI
The functions and powers of SEBI have been listed in the SEBI Act,1992. SEBI caters to the needs of three parties operating in the Indian Capital Market. These three participants are mentioned below:
Issuers of the Securities
Companies that issue securities are listed on the stock exchange. They issue shares to raise funds. SEBI ensures that the issuance of Initial Public Offerings (IPOs) and Follow-up Public Offers (FPOs) can take place in a healthy and transparent way.
Protects the Interests of Traders & Investors
It is a fact that the capital markets are functioning just because the traders exist. SEBI is responsible for safeguarding their interests and ensuring that the investors do not become victims of any stock market fraud or manipulation.
Financial Intermediaries
SEBI acts as a mediator in the stock market to ensure that all the market transactions take place in a secure and smooth manner. It monitors every activity of the financial intermediaries, such as broker, sub-broker, NBFCs, etc
What are the Powers of SEBI
SEBI has 3 types of powers:
Quasi-Judicial powers
SEBI can conduct hearings, consider evidence, and arguments submitted by the accused or complainant, and pass rulings in different kinds of proceedings as mandated by enactments and rules. A good example is insider trading rulings by SEBI.
Quasi-Legislative powers
SEBI has to draft rules and regulations for the protection and promotion of the market and interests of all the stakeholders. SEBI has issued 18 different rules and 47 regulations over the years that govern every aspect of capital market transactions.
Quasi-Executive
Any rules and regulations are only as good as their enforcement. SEBI is authorised to file a case against anyone who violates its rules and regulation. It is empowered to inspect account books and other documents as well if it finds traces of any suspicious activity. It has a large executive function that administers and enforces the extensive rules and regulations that the regulator has legislated.
Who gets to work on all these things?
SEBI officers, of course. Does that sound like an interesting and rewarding career to you?
Imagine having a coveted secure government job in SEBI where you fight corruption, sinister financial fraudsters who are always coming up with new ways to defraud the public and destabilize our economy and regulate the securities market on the government’s behalf.
But if you are interested in this career, you have to pass the exam that will make you eligible to join as a SEBI officer.
How can I prepare for the SEBI Grade A law officer exam?
It’s been a month since we launched our SEBI Grade A Test prep crash course.
If you haven’t purchased any of our test-prep courses yet, this mail would be the perfect opportunity for you to have an insight into our course.
We have attached a lot of free study materials that will keep you busy if you decide to make the best use of them.
A lot of you might not even be aware of the SEBI Grade A Legal Exam that can be quite a wonderful opportunity for all government job aspirants out there! It has all the glitz and bling of a coveted well paying job in the government sector.
In case you don’t, you can know the details of this exam, you can check out this webinar here.
Some of you might not be interested in this exam but might know someone who is.
It would be great if you could forward this mail to someone who is preparing for this exam.
Can this be your dream job?
Law students and new graduates always dream of a job that can give them this perfect blend of job security; a perfect work-life balance; is well paid and is intellectually satisfying.
This is one of the biggest reasons why people look out for well-coveted government jobs that can check all these boxes.
However, the biggest problem with some of the most popular government exams is the uncertainty of leaving city life and then being posted in some remote area of the country.
A lot of people do not like the idea of shifting to a remote part of the country for employment. And that is an entirely personal choice while many others are ready to make a personal sacrifice in service of the nation.
This is where the SEBI Grade A Legal Exam does better than a lot of other coveted government jobs. Being the capital market regulator of India, the Securities and Exchange Board has its offices in the metropolitan cities of the country and the selected officers only get posted in major cities of the country. Primarily in Mumbai and Delhi.
How are the pay and perks?
The starting gross pay of a SEBI Grade A Legal Officer is around 1,07,000/- (without accommodation) and 73,000/- (with accommodation).
This is just the entry-level starting salary. It goes up significantly as you get seniority over time.
Besides, you get to enjoy all the perks and allowances that a government officer has!
Secondly, if you are one of those people who has always had a knack for corporate law and was looking for a government job nonetheless, this exam would be like a dream come true. Also, what are your other options where you get to work with corporate law in a government set up? SEBI officers are at the cutting edge of security laws, and that is why even big law firms are always eager to hire former SEBI officers.
To be an effective SEBI law officer you have to be well-versed with all the corporate laws and regulations that have fascinated you since day one. It is the best of both worlds.
What is this SEBI law officer exam like?
All the phases of the SEBI Grade A exam will now be conducted online, and the selection shall be a three-stage process.
Phase 1: prelims: on-line screening examination consisting of two papers of 100 marks each
Phase 2: Mains: on-line examination consisting of two papers of 100 marks each
Phase 3: Interview
The first two phases are MCQ based exams which will typically test your speed and accuracy at the same time. Both phases have the legal portion in paper 2.
Paper 1 will test your general aptitude and intelligence. Multiple-choice questions on subjects like General Awareness (including some questions related to the Financial Sector of easy to moderate difficulty level), English Language, Quantitative Aptitude and Logical Reasoning.
Paper 2 is legal, in both the phases! You approximately get 40 minutes to answer 100 questions in paper-2.
Paper 1 in phase 2 is a descriptive English paper. It will test your drafting skills.
If you scare 40% in phase 1, you will get to phase 2. If you crack phase 2, you have to then clear the interview round.
Is it a difficult task? For sure.
Is it impossible to crack? Not at all. It is far, far less intensive than cracking the judiciary or assistant public prosecutor exam, which for some reason, far more lawyers tend to write. Perhaps the lack of knowledge of business laws keeps a lot of people away from this lucrative exam.
So how can you effectively prepare for this exam?
How can you ensure your accuracy and conceptual understanding for an exam that thoroughly tests them?
Here are a few tips that can help
Know your bare acts inside out
One of the most important tricks that can help you with any competitive exam pertaining to law is to know your bare acts inside out.
You will be asked a lot of questions that have been handpicked from the sections or illustrations themselves. The only way to be able to solve them in a jiffy would be to know those concepts by heart. This can help you in saving a lot of valuable time for application-based questions (if any). Thus, your first step towards your preparation for the exam would be to gain a good command over your bare acts.
Still thinking about how that can be done, check out these videos where we cover some of the toughest provisions of the Code of Civil Procedure through the technique of ‘Divide and Learn’ here.
Formulating the right strategy
Having the right strategy can make or break any exam.
You need to be able to devise the right study plan, strategize in the right way and execute it accordingly in order to clear any competitive exam. You must also learn to plan your preparation in accordance with the weightage allotted to different subjects. This can significantly boost your chances of clearing the same!
Practice, Practice and Practice!
Since the SEBI exam is an actual race against time, it is pertinent to practice as much as you can.
Your legal paper would only provide you with 40 minutes to solve a total of 100 questions!
This might seem to be a herculean task at first, but once you start practising in the right manner, this would not be as impossible as you might have thought before.
How can LawSikho’s SEBI Grade A Legal Officers Test Prep Crash Course help?
The crash course has been designed keeping in mind your daily chores and activities. We understand that a lot of you might be working professionals who might not have the time and bandwidth to indulge yourselves in the task of creating a proper time-table and abiding by the same. We have tried to cater to that need as well.
Worried about not being able to attend the live classes due to your hectic schedule?
Don’t worry, we have got you covered there as well. Our classes are designed to take place on the weekends at a convenient time to ensure that your other commitments are not hampered.
To cater to your requirements of practising mocks, we provide you with chapter-wise assignments, which are followed by weekly tests that have articulated keeping your targets for the former week in mind.
Furthermore, these would eventually be substantiated by rigorous mocks that will leave no stone unturned in preparing our warriors for the exam!
Anything left out?
Within this crash course, we provide for not only doubt clearing sessions, but also free complimentary material for Paper 1 – all at one place! And I will tell you what, if you join our phase 1 course right now, and clear it, we will prepare you for phase 2 without charging anything more. Also, we will induct you into a free legal drafting course so you can start preparing for paper 1 of Phase 2. After all, there is time in hand now, and it is hard to learn drafting so fast!
For more details on the SEBI Grade A Course, look here.
Have you heard about our webinars?
LawSikho offers amazing webinars that you can attend and learn from, with no charges, every day. Now we are even giving certificates to those who attend the full webinar. Check out some of our past webinars here: https://www.youtube.com/c/LawSikho/
While you can see past recordings of webinars on our YouTube channel, to participate in one personally is quite a different experience, as you can ask questions and interact with such amazing speakers and even other attendees. How can you attend these webinars in person? Sign up over here.
Contact LawSikho
If you need any help from our side, you can always get in touch with us. Give us a call on 011 4084 5203.
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