The Role of SEBI in Protecting Investors in the Indian Stock Market

Investor confidence is the foundation on which every securities market rests. In India, the Securities and Exchange Board of India (SEBI) is the institution charged with sustaining it. This article examines how SEBI protects investors in the Indian stock market through three lenses: its statutory mandate under the SEBI Act, 1992; the preventive, enforcement and remedial tools it deploys; and the judicial and political checks that discipline its power. Drawing on leading Supreme Court decisions and recent regulatory episodes, including the 2024 reforms on retail derivatives trading and the 2025 action against Jane Street Group, the article argues that SEBI has evolved from a reactive watchdog into a rule-maker, investigator and adjudicator of considerable reach. It contends, however, that the concentration of functions, slow adjudication and the persistent vulnerability of retail investors call for continued reform, and it assesses the Securities Markets Code, 2025 against that need.