Consider the following statements about SEBI:
(A) Conducting research and publishing information useful to all market participants is a development function of SEBI.
(B) SEBI was to function under the overall administrative control of the Ministry of Corporate Affairs.
(C) SEBI also aims to stimulate competition and encourage innovation.
(D) Training of intermediaries of the securities market is a protective function of SEBI.
(E) The regulatory functions of SEBI include the regulation of underwriters and merchant bankers.
Which of the statements given above are correct?
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → (A), (C) and (E) only
(A) Conducting research and publishing information useful to all market participants is a development function of SEBI. — Correct. Research and useful information help the whole market grow. So this is one of SEBI’s development functions.
(B) SEBI was to function under the overall administrative control of the Ministry of Corporate Affairs. — Incorrect. SEBI was set up to work under the control of the Ministry of Finance of the Government of India.
(C) SEBI also aims to stimulate competition and encourage innovation. — Correct. SEBI’s basic purpose is an environment for the efficient mobilisation and allocation of resources. Along with this, it aims to stimulate competition and encourage innovation.
(D) Training of intermediaries of the securities market is a protective function of SEBI. — Incorrect. Training of intermediaries is a development function. Protective functions deal with fraud, insider trading and investor protection.
(E) The regulatory functions of SEBI include the regulation of underwriters and merchant bankers. — Correct. SEBI regulates stock brokers, underwriters, merchant bankers and the business in stock exchanges. This is one of its regulatory functions.
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. …” “Purpose and Role of SEBI The basic purpose of SEBI is to create an environment to facilitate efficient mobilisation and allocation of resources through the securities markets. It also aims to stimulate competition and encourage innovation. …” “Regulatory Functions 1. Registration of brokers and sub-brokers and other players in the market. “Development Functions 1. Training of intermediaries of the securities market. |