When the Government of India first set up SEBI, in what form was it established?
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → As an interim administrative body
Option (1) As a statutory body under an Act of Parliament — Incorrect. Statutory status came later, on 30 January 1992, through an ordinance. An Act of Parliament then replaced the ordinance.
Option (2) As a self-regulatory body of the securities industry — Incorrect. Self regulation by the securities industry is something SEBI tries to balance with statutory regulation. SEBI itself was set up by the Government of India.
Option (3) As a non-statutory advisory committee — Incorrect. Advisory committees, such as the Primary Market Advisory Committee, were formed later by SEBI to advise it.
Option (4) As an interim administrative body — Correct. On 12 April 1988 the Government set up SEBI as an interim administrative body. Interim means for the time being. It worked under the Ministry of Finance and got statutory status only in 1992.
NCERT (Pre-rationalised Edition): “SECURITIES AND EXCHANGE BOARD OF INDIA (SEBI) The Securities and Exchange Board of India was established by the Government of India on 12 April 1988 as an interim administrative body to promote orderly and healthy growth of securities market and for investor protection. It was to function under the overall administrative control of the Ministry of Finance of the Government of India. The SEBI was given a statutory status on 30 January 1992 through an ordinance. The ordinance was later replaced by an Act of Parliament known as the Securities and Exchange Board of India Act, 1992. …” |