Question

It was established by the Government of India on 12 April 1988 as an interim administrative body to promote orderly and healthy growth of the securities market and for investor protection. It was given statutory status in 1992 through an Act of Parliament.

(I) Identify the regulatory body which has been highlighted above.

(II) State the three objectives of the regulatory body identified in part (I).

(III) State any two functions that are performed for the development of the securities market by the regulatory body identified in part (I).

Answer 1

(I) Securities Exchange Board of India(SEBI) 

(II) Objectives of SEBI are 

• to regulate the stock exchanges and the security industry to promote their orderly functioning. 
• to protect the rights and interest of the investors, particularly individual investors to guide and educate them. 
• to prevent trading Malpractices and achieve a balance between self regulation by the security industries and its statutory regulation. 
• to regulate and develop a code of conduct and fair practices, by intermediaries like brokers, merchant brokers etc. with a view of making them competitive and professional.

(III) Developmental functions:

• Training of intermediaries of the securities market. 
• Conducting research and publishing information useful to all market participants. 
• Undertaking measures to develop the capital markets by adapting a flexible approach.