Which of the following is NOT a part of the environment that SEBI aim…

Which of the following is NOT a part of the environment that SEBI aims to create for the securities markets?

Answer & explanation

Correct answer: option 3

The correct answer is Option (3) → Training and research facilities

Option (1) Rules and regulations — A part of the environment. Rules and regulations set how the market must work.

Option (2) Institutions and their interrelationships — A part of the environment. The market runs through institutions and their links with one another.

Option (3) Training and research facilities — Not a part of the environment. Training of intermediaries and conducting research are development functions of SEBI. They are tasks SEBI performs, not parts of the environment it aims to create.

Option (4) Infrastructure and policy framework — A part of the environment. The environment also covers the market’s infrastructure and the policy framework within which the market works.

NCERT (Pre-rationalised Edition): “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. This environment includes rules and regulations, institutions and their interrelationships, instruments, practices, infrastructure and policy framework.
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. …”

“Development Functions 1. Training of intermediaries of the securities market.
2. Conducting research and publishing information useful to all market participants.
3. Undertaking measures to develop the capital markets by adapting a flexible approach. …”