Business StudiesFinancial Markets

SEBI aims to offer one group a competitive, professionalised and expa…

SEBI aims to offer one group a competitive, professionalised and expanding market with adequate and efficient infrastructure. Which group is this?

Answer & explanation

Correct answer: option 4

The correct answer is Option (4) → The market intermediaries

Option (1) The issuers of securities — Incorrect. For issuers, SEBI aims at a market place to raise finances easily, fairly and efficiently.

Option (2) The investors — Incorrect. For investors, SEBI aims at protection of their rights and interests through proper information.

Option (3) The stock exchanges — Incorrect. A stock exchange is not one of the three groups of the market. It is a place of trading that SEBI regulates.

Option (4) The market intermediaries — Correct. Intermediaries are brokers, merchant bankers and others who link issuers and investors. SEBI offers them a competitive, professionalised and expanding market, so that they can serve better.

NCERT (Pre-rationalised Edition): “Purpose and Role of SEBI … This environment aims at meeting the needs of the three groups which basically constitute the market, viz, the issuers of securities (Companies), the investors and the market intermediaries.
• To the issuers, it aims to provide a market place in which they can confidently look forward to raising finances they need in an easy, fair and efficient manner.
• To the investors, it should provide protection of their rights and interests through adequate, accurate and authentic information and disclosure of information on a continuous basis.
• To the intermediaries, it should offer a competitive, professionalised and expanding market with adequate and efficient infrastructure so that they are able to render better service to the investors and issuers. …”