Question

State any three protective functions of the Securities and Exchange Board of India (SEBI).

Hint:

SEBI’s regulatory framework ensures transparency, fairness, and efficiency in financial markets, fostering investor confidence.

Answer 1

The Securities and Exchange Board of India (SEBI) is vital for overseeing and safeguarding investors within the securities market. Key investor protection measures include:
(i) Prohibition of deceptive and inequitable trading: SEBI acts against unethical conduct like price manipulation, misrepresentation, and insider trading to maintain market integrity.
(ii) Regulation of insider trading: SEBI oversees and penalizes those who exploit non-public information for market advantage, ensuring equitable opportunities for all participants.
(iii) Upholding investor safeguards: SEBI implements rules to protect investor rights and promote ethical transactions in the securities market.