Question

State any three development functions of Securities and Exchange Board of India.

Hint:

Remember: Regulatory functions "police" the market. Development functions "grow and educate" the market.

Answer 1

Correct Answer: 3

Step 1: Recall the three types of SEBI functions.
SEBI performs three broad categories of functions: Protective (to protect investors), Regulatory (to control market participants), and Developmental (to promote growth). The question asks only about Developmental functions.
Step 2: Identify Development Function 1 - Training of Intermediaries.
SEBI actively promotes training programmes for market intermediaries such as brokers, sub-brokers, and investment advisers. A well-trained intermediary community ensures that the market operates ethically and professionally, which in turn builds investor confidence.
Step 3: Identify Development Function 2 - Research and Publication.
SEBI conducts and publishes research on capital markets. This data and analysis helps investors, companies, and other participants understand market trends, make informed decisions, and contributes to the overall development of the securities market in India.
Step 4: Identify Development Function 3 - Adopting Flexible and Progressive Approaches.
SEBI promotes the growth of the capital market by adopting flexible, forward-looking measures. For example, it allowed internet-based trading through registered stock brokers and permitted companies to raise funds through the primary market via online IPOs. These steps expand market participation and modernize the infrastructure.
Step 5: Understand why these are called developmental.
Unlike protective functions (which prevent harm) or regulatory functions (which impose rules), developmental functions are proactive steps to expand, modernize, and educate the market so that more people can participate with confidence.
Step 6: State the three functions concisely as the final answer.
These three functions together ensure that SEBI builds a modern, educated, and accessible capital market ecosystem.
\[ \boxed{ \text{1. Training intermediaries, 2. Research and publication, 3. Adopting flexible approaches} } \]