Question

SEBI primarily regulates:

• A. Agricultural markets
• B. Banking sector only
• C. Securities market
• D. Foreign trade

Hint:

SEBI protects investors and regulates stock markets in India.

Answer 1

The Correct Option is C

Step 1: Understanding the Concept:
The Securities and Exchange Board of India (SEBI) is the statutory regulatory body established by the Government of India in 1992 (statutory status) to oversee the Indian capital markets.
Its creation was a response to the need for a more transparent and regulated environment for investors, especially after several high-profile stock market scams in the late 1980s and early 1990s.
Step 2: Detailed Explanation:
SEBI's Jurisdictional Scope:
SEBI was established with a triple objective: to protect the interests of investors, to regulate the securities market, and to promote its development.
It regulates various entities and activities within the "Securities Market" (Stock Market), including:
1. Stock Exchanges: Monitoring the trading activities on BSE, NSE, etc.
2. Intermediaries: Registering and regulating brokers, sub-brokers, merchant bankers, and portfolio managers.
3. Mutual Funds: Setting the rules for how mutual fund schemes are launched and managed.
4. Listed Companies: Ensuring that companies whose shares are traded on the exchange follow strict disclosure and transparency norms.
5. Insider Trading: Detecting and punishing individuals who use non-public information to profit from share price movements.
Why other options are incorrect:
(A) Agricultural markets: These are largely regulated by state governments through APMC (Agricultural Produce Market Committee) Acts.
(B) Banking sector: This is the domain of the Reserve Bank of India (RBI). While SEBI might coordinate with RBI on certain financial matters, banking is not SEBI's primary regulatory focus.
(D) Foreign trade: This is regulated by the Ministry of Commerce and Industry through the Directorate General of Foreign Trade (DGFT) and influenced by EXIM policies.
Step 3: Final Answer:
SEBI is the apex regulator for the Indian Securities Market, ensuring transparency, fairness, and investor protection in the trading of shares and debentures.