Section 4 of The Securities and Exchange Board of India Act, 1992
- (1)The Board shall consist of the following members, namely:—
- (a)a Chairman;
- (b)two members from amongst the officials of the 3[Ministry] of the Central Government dealing with Finance 4[and administration of the Companies Act, 1956 (1 of 1956)];
- (c)one member from amongst the officials of 5[the Reserve Bank]; 6[(d) five other members of whom at least three shall be the whole-time members,] to be appointed by the Central Government.
- (2)The general superintendence, direction and management of the affairs of the Board shall vest in a Board of members, which may exercise all powers and do all acts and things which may be exercised or done by the Board.
- (3)Save as otherwise determined by regulations, the Chairman shall also have powers of general superintendence and direction of the affairs of the Board and may also exercise all powers and do all acts and things which may be exercised or done by that Board.
- (4)The Chairman and members referred to in clauses (a) and (d) of sub-section (1) shall be appointed by the Central Government and the members referred to in clauses (b) and (c) of that sub-section shall be nominated by the Central Government and the 7[Reserve Bank] respectively.
- (5)The Chairman and the other members referred to in clauses (a) and (d) of sub-section (1) shall be persons of ability, integrity and standing who have shown capacity in dealing with problems relating to securities market or have special knowledge or experience of law, finance, economics, accountancy, administration or in any other discipline which, in the opinion of the Central Government, shall be useful to the Board.
Summary
- The Board consists of a Chairman, two officials from the Central Government ministries dealing with Finance and the Companies Act, one official from the Reserve Bank, and five other members.
- Of the five other members, at least three must be whole-time (full-time) members.
- The Chairman and the five other members are appointed directly by the Central Government.
- The government and bank officials are nominated by the Central Government and the Reserve Bank, respectively.
- The Chairman and the five other members must be people of high integrity with expertise in areas like finance, law, economics, or administration.
Practical examples
FAQ
1. Who appoints the Chairman of the Board?
The Chairman is appointed by the Central Government.
2. How many people on the Board come from the Reserve Bank?
Exactly one member comes from amongst the officials of the Reserve Bank.
3. What qualifications do the Chairman and the five other members need?
They must be people of ability and integrity with special knowledge or experience in law, finance, economics, accountancy, or administration.
Test yourself
Q1.Under Section 4 of The Securities and Exchange Board of India Act, 1992, how many members are nominated from amongst the officials of the Reserve Bank?
Q2.Under Section 4 of The Securities and Exchange Board of India Act, 1992, out of the five other members appointed to the Board, what is the minimum number that must be whole-time members?
Q3.Under Section 4 of The Securities and Exchange Board of India Act, 1992, who has the power of general superintendence and direction of the affairs of the Board, save as otherwise determined by regulations?
Q4.Under Section 4 of The Securities and Exchange Board of India Act, 1992, which two specific areas must the Central Government officials deal with to be eligible for the Board?
Q5.Under Section 4 of The Securities and Exchange Board of India Act, 1992, who appoints the Chairman and the five other members?