Question

Discuss in brief any four protective functions of SEBI.
answer in brief pls
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Answer 1

The three protective functions of SEBI are as follows:

(i) Controlling insider trading and imposing penalties for such practices.

(ii) Undertaking steps for investor protection.

(iii) Promotion of fair practices and code of conduct in securities market.

hope you understand the answer

Answer 2

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➣ Four protective functions of SEBI are :

• 1) Prohibition of unfair trade practice : An important protective function of SEBI is the prohibition of unfair as well as fraudulent trade practices in connection with stock market. SEBI checks the fraudulent and unfair trade practices like making misleading statements, manipulation, price rigging etc. and prohibite these.

• 2) Protection for the investors : Another protective function of SEBI is the protection of investors dealing in the security markets. SEBI undertakes various steps for the investors protection. It also provides education to the investors relating to the process and rules of the securities market.

• 3) Control insider trading : Controlling insider trading in the stock market is another protective function performed by SEBI. Insider trading refers to buying and selling of securities by those who have some secret information about the company and also who wish to take the advantage of such secret information. SEBI checks such insider trading and control it.

• 4) Promote fair trade practice : This is an important protective function performed by SEBI. SEBI promotes fair trade practices in the stock market. It also promote code of conduct relating the securities market.

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➣ WHAT IS SEBI ?

➥ The term "SEBI" stands for Securities and Exchange Board of India. It was established in 12 April, 1988 and was given statutory status in 30 January, 1992 through the Securities and Exchange Board of India Act in 1992. The head office of SEBI is situated in Bandra Kurla Complex, Mumbai.

• The primary objective of SEBI is to protect the interest of the investors in the securities market and to provide them a healthy and safe environment for investment.

➣ The SEBI is managed by the members that consists of the following :

1. The chairman, who is nominated by the Union Government of India.
2. Two members or officers are from the Union Finance Ministry.
3. One member is from the Reserve Bank of India.
4. The remaining five members are nominated by the Union Government of India. Out of these five members, at least three shall be whole-time members.