Question

Explain the objectives and functions of the SEBI

Answer 1

SOLUTION :

Objectives of the SEBI are :  

(i) To regulate stock exchanges in the functioning of intermediaries to promote orderly function.

(ii) To protect the rights of the investors, guide and educate them.

(iii) To stop trading malpractices like insider training, price rigging, etc.

(iv) To develop code of conduct for the fair dealings by the brokers, merchant bankers,etc.

(v) To develop professionalism and fair competition among all intermediaries and investors.

 

Functions of SEBI :  

Regulatory functions :  

• Registration of brokers and sub brokers.

• Registration of mutual funds and collective investment schemes.

• Regulations of stock brokers, merchant bankers and underwriters.

• Undertaking inspection, conducting enquiries and audit of stock exchanges.

 

Developmental functions :  

• Training intermediaries of the stock market.

• Conducting research and publication of important information for the benefit of investors and  intermarries.  

• Undertaking of such measures which are useful to develop capital markets.

 

Protective functions :  

• Prohibition of all unfair trade practices like insider trading, price rigging, misleading information in prospectus, etc.

• Penalising the concerned person who are involved in malpractices.

• Undertaking steps for Investors Protection.

• Ensuring implementation of code of conduct and fair trade practices.

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Answer 2

Explanation:

The fundamental objective of SEBI is to safeguard the interest of all the parties involved in trading. It also regulates the functioning of the stock market. SEBI's objectives are: To monitor the activities of the stock exchange.