___________ is not a function of Securities and Exchange Board of India (SEBI).
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → Governmental Function
Option (1) Regulatory Function — A function of SEBI (Incorrect). Under this function SEBI registers brokers, sub-brokers and other middlemen. It also frames the rules for takeovers and holds enquiries and audits of the stock exchanges.
Option (2) Governmental Function — Not a function of SEBI (Correct). SEBI’s functions are of three kinds only, and there is no fourth. SEBI controls the securities market under powers given to it by an Act of Parliament. But it is a regulator set up by the Government, not a part of the Government. Making government policy is no part of its work.
Option (3) Protective Function — A function of SEBI (Incorrect). Under this function SEBI stops insider trading and price rigging. It bans unfair and fraudulent trade practices, and it educates investors so that they can protect themselves.
Option (4) Development Function — A function of SEBI (Incorrect). Under this function SEBI trains the middlemen of the market, promotes fair trading, has allowed internet trading and carries out research.
Note: 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): “Functions of SEBI Keeping in mind the emerging nature of the securities market in India, SEBI was entrusted with the twin task of both regulation and development of the securities market. It also has certain protective functions.” |