Lokesh and litesh are two friends. They started a business of making affordable Housing societies named as Ashiyana homes for underprivileged people. People invested ` 3000 crore into this project. Later on, it was discovered that they it was an illegal business and conducted various fraudulent activities in the company.The SEBI has imposed a penalty of ` 400 crores on Ashiyana Homes Ltd. While imposing the penalty, the biggest in its history, Securities and Exchange Board of India (SEBI) said the company deserved “maximum penalty” for duping the common man. Its
Prevention of Fraudulent and Unfair Trade Practices Regulations provides for
“severe to severe penalties” for dealing with such violations. As per SEBI norms, it can impose a penalty of ` 25 crore or three times of the profit made by indulging in fraudulent and unfair trade practices and in the present case, the regulator has imposed a fine equivalent to three times of the illicit gains. In the context of the above case:
(a) State the objectives of setting up SEBI.
(b) Identify the type of function performed by SEBI by quoting lines from the paragraph.
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a) The objectives of setting up SEBI are outlined below :
- To prevent trading malpractices in the securities market
- To protect the right and interest of investors and to guide and educate them .
- To regulate and develop a code of conduct and fair practices by intermediaries like broker , merchant bankers etc, with a view to making them competitive and professional.
- To regulate stock exchange and the securities market to promote the orderly functioning .
b) Protective function is performed by SEBI: " The SEBI has imposed a penalty of Rs.400 crores on Ashiyana Homes Ltd.
Three protective function of SEBI are as follows :
- Prohibition of fraudulent and unfair trade practices like making misleading statements , price riggings , etc.
- Controlling insider trading and imposing penalties for such practices.
- Undertaking steps for investors protection like registration of broker; audit of stock exchange , registration of mutual funds etc.
What is SEBI ?
SEBI is a statutory body and a market regulator , which controls the securities market in India . The basic function of SEBI is to protect the interest of investors in securities and to promote and regulate the securities market .SEBI is run by its board of members.
Learn more about the role of SEBI:
https://brainly.in/question/51358896
Know more about function and objectives of SEBI:
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