Identify the function performed by SEBI:
"It controls insider trading and imposes penalties for such practices".
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → Protective function.
"It controls insider trading and imposes penalties for such practices"- This is the protective function 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. SEBI was entrusted with the twin task of both regulation and development of the securities market. It perform 3 type of function-
* Regulatory Functions, * Development Functions, * Protective Functions
PROTECTIVE FUNCTIONS are as follows-
1.Prohibition of fraudulent and unfair trade practices like making misleading statements, manipulations, price rigging etc.
2.Controlling insider trading and imposing penalties for such practices.
3.Undertaking steps for investor protection.
4.Promotion of fair practices and code of conduct in securities market.