Though SEBI has come a long way in acquiring more powers and wielding great authority in regulating the Indian capital market, it also suffers from a number of shortcomings. These are as follows:

  1. Lack of adequate required power: While creating the SEBI, the Government of India seems to have been influenced by regulatory measures adopted in the US to guide the country’s securities market into orderly development. The counterpart of SEBI in the US is the Securities and Exchange Commission (SEC). However, SEC is entrusted with more penal powers to discipline recalcitrant traders in the market. To make SEBI perform and act like SEC, the Government of India should have provided it with powers to penalize and debar wrongdoers. ...

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