question_answer

A stock exchange is an institution which provides a platform for buying and selling of existing securities. SEBI, as a watch dog performs various functions which protects the investors.

(i) Explain the regulatory and protective functions of SEBI.

(ii) Name the values which SEBI strives to fulfil through its functions.

Answer:

(i) [a] SEBI performs the following regulatory functions: (any three) Registration of brokers, sub-brokers and other players in the market. Registration of collective investment schemes and mutual funds. Regulation of takeover bids by companies. Levying fee or other charges for carrying out the purposes of the Act. [b] SEBI Performs the following protective functions: (any three) Prohibition of fraudulent and unfair trade practices. Controlling insider trading and imposing penalties for such practices. Undertaking steps for investor protection. Promotion of fair practices and code of conduct in securities market. Because of the regulatory and protective functions performed by SEBI, it is a watch dog of security market. (ii) The values which SEBI fulfils are: (any two) [a] Safety                      [b] Transparency [c] Fairness