Which of the following is NOT a protective function of SEBI?
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → Registration of collective investment schemes and mutual funds
Option (1) Prohibition of fraudulent and unfair trade practices like price rigging — Protective function. Stopping fraud and price rigging guards investors against being cheated.
Option (2) Controlling insider trading and imposing penalties for such practices — Protective function. Insider trading hurts ordinary investors, so SEBI controls it and punishes it.
Option (3) Promotion of fair practices and code of conduct in the securities market — Protective function. A fair market with a code of conduct keeps investors safe.
Option (4) Registration of collective investment schemes and mutual funds — Not a protective function. Registering these schemes brings them under SEBI’s rules. It is a regulatory function.
NCERT (Pre-rationalised Edition): “Regulatory Functions 1. Registration of brokers and sub-brokers and other players in the market. “Protective Functions 1. Prohibition of fraudulent and unfair trade practices like making misleading statements, manipulations, price rigging etc. |