Business StudiesFinancial Markets

One objective of SEBI is to regulate stock exchanges and the securiti…

One objective of SEBI is to regulate stock exchanges and the securities industry to promote their __________ functioning.

Answer & explanation

Correct answer: option 3

The correct answer is Option (3) → orderly

SEBI’s first objective is to regulate stock exchanges and the securities industry to promote their orderly functioning. Orderly means trading runs by set rules, without confusion or misuse.

NCERT (Pre-rationalised Edition): “SECURITIES AND EXCHANGE BOARD OF INDIA (SEBI) … Objectives of SEBI The overall objective of SEBI is to protect the interests of investors and to promote the development of, and regulate the securities market. This may be elaborated as follows:
1. To regulate stock exchanges and the securities industry to promote their orderly functioning.
2. To protect the rights and interests of investors, particularly individual investors and to guide and educate them.
3. To prevent trading malpractices and achieve a balance between self regulation by the securities industry and its statutory regulation.
4. To regulate and develop a code of conduct and fair practices by intermediaries like brokers, merchant bankers etc., with a view to making them competitive and professional. …”