Which of the following is not an objective of SEBI?

Answer & explanation

Correct answer: option 4

The correct answer is Option (4) → Provide a trading platform for equities of small and medium enterprises

Option (1) Regulate stock exchange and the securities industry to promote their orderly functioning — An objective of SEBI (Incorrect). SEBI is the regulator of the securities market, and stock exchanges work under its rules.
Option (2) Protect the rights and interests of investors — An objective of SEBI (Incorrect). Protecting investors, especially individual investors, is the main reason SEBI exists.
Option (3) Prevent trading malpractices and achieve a balance between self regulation by the securities industry and its statutory regulation — An objective of SEBI (Incorrect). Self regulation means the rules the industry makes for itself. Statutory regulation means the rules made under law. SEBI keeps the two in balance.
Option (4) Provide a trading platform for equities of small and medium enterprises — Not an objective of SEBI (Correct). SEBI regulates the market; it does not run a place where shares are traded. A trading platform is run by a stock exchange. This is one of the objectives of BSE Ltd.

Note 1: Although the chapter ‘Financial Markets’ was dropped from the NCERT textbooks during rationalisation, it has stayed in the NTA syllabus every year since 2022, except for 2025, and it is part of the syllabus again from 2026. This question is therefore based on the pre-rationalised NCERT, an extract from which is given below.

NCERT (Pre-rationalised Edition): “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.”

Note 2: The same/similar question has been asked in different years by NTA as per the details given below: