Business StudiesFinancial Markets

The environment that SEBI aims to create is meant to meet the needs o…

The environment that SEBI aims to create is meant to meet the needs of the groups which basically constitute the securities market. Which of the following is NOT one of these groups?

Answer & explanation

Correct answer: option 3

The correct answer is Option (3) → The stock exchanges

Option (1) The issuers of securities (companies) — One of the groups. Companies issue securities to raise finances in the market.

Option (2) The investors — One of the groups. Investors buy securities and need protection of their rights and interests.

Option (3) The stock exchanges — Not one of the groups. A stock exchange is a market place where securities are traded. SEBI regulates it; it is not one of the three groups whose needs the environment meets.

Option (4) The market intermediaries — One of the groups. Intermediaries such as brokers and merchant bankers serve investors and issuers.

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. …”