SEBI protects retail investors by registering and supervising market intermediaries, forcing companies to disclose information, acting against fraud and manipulation, and giving investors a formal way to raise complaints. It does not protect you from market losses, but it works to make the market fair.
The main safeguards you benefit from:
- Registration: brokers, mutual funds, research analysts and investment advisers must be registered and follow conduct rules. You can check any entity’s registration on SEBI’s website.
- Disclosure: listed companies must publish results, shareholding and material events, so everyone gets the same information.
- Market integrity: rules on insider trading and manipulation, and action against pump-and-dump schemes.
- Safety of funds: measures such as T+1 settlement and the UPI block mechanism, under which money stays in your bank account until a trade is settled at qualified brokers.
- Risk controls: the 2024 F&O framework raised contract sizes and tightened expiry-day rules after SEBI found that most individual traders were losing money.
- Grievance redress: the SCORES complaint portal and online dispute resolution.
Nomination rules have also changed. From March 2025, in phases, you can add up to 10 nominees to a demat account or mutual fund folio, which makes it easier for families to claim holdings.
Even with all this, many retail losses come from unregistered tip-givers. Always check registration before paying anyone for advice.
Investor protection and SEBI’s role are covered early in our Diploma in Stock Market course.