Which of the following are the objectives of the Securities and Exchange Board of India?
(A) To establish a nationwide trading facility for all types of securities.
(B) To regulate stock exchanges and the securities industry.
(C) To protect the rights and interests of investors
(D) To prevent trading malpractices
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → (B), (C) and (D) only
(A) To establish a nationwide trading facility for all types of securities. — Incorrect. This is an objective of the National Stock Exchange (NSE), which set up a trading system reaching the whole country. SEBI regulates stock exchanges; it does not run one.
(B) To regulate stock exchanges and the securities industry. — Correct. This keeps the market working in an orderly way.
(C) To protect the rights and interests of investors — Correct. Individual investors especially need guidance and protection.
(D) To prevent trading malpractices — Correct. SEBI balances the industry’s own self-regulation with regulation by law.
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): “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.” |