Which of the following is not an objective of SEBI?

Answer & explanation

Correct answer: option 4

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

Option (1) To regulate stock exchange — An objective of SEBI (Incorrect). SEBI regulates stock exchanges and the securities industry so that they work in an orderly way.
Option (2) To regulate and develop a code of conduct and fair practices — An objective of SEBI (Incorrect). This code applies to intermediaries such as brokers and merchant bankers, to make them competitive and professional.
Option (3) To protect the right and interest of investors — An objective of SEBI (Incorrect). Protecting investors, particularly individual investors, and guiding and educating them is at the centre of SEBI’s work.
Option (4) To provide a trading platform for equities of small and medium enterprises — Not an objective of SEBI (Correct). SEBI is a regulator. It frames rules and watches over the market, but it does not run a market in which shares are bought and sold. A trading platform is provided by a stock exchange. The OTCEI, for example, was set up to give small and medium companies a way to raise capital and have their shares traded.

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: