Question

Which of the following is not a protective function of Securities and Exchange Board of India?

• A. Prohibition of fraudulent and unfair trade practices.
• B. Controlling insider trading and imposing penalties for such practices.
• C. Promotion of fair practices and code of conduct in securities market.
• D. Undertaking measures to develop the capital markets by adapting a flexible approach.

Hint:

SEBI’s protective functions aim to ensure transparency and fairness in the securities market.- Development functions focus on market growth, investor education, and fostering innovation.- The role of SEBI is crucial for maintaining investor confidence and market stability.

Answer 1

The Correct Option is D

The query seeks to identify the option that does not represent a protective function of the Securities and Exchange Board of India (SEBI). We will examine each option:

1. Prohibiting fraudulent and unfair trade practices: This is a protective function. SEBI prevents market manipulation to safeguard investor interests.
2. Controlling insider trading and penalizing offenders: This is also a protective function. By curbing insider trading, SEBI upholds market integrity and investor confidence.
3. Promoting fair practices and a code of conduct in the securities market: This is another protective measure designed to protect investors and ensure market transparency.
4. Implementing measures for capital market development through a flexible approach: This option pertains to market development, aligning with SEBI's developmental functions, not its protective ones.

Consequently, the correct option is the fourth one: Implementing measures for capital market development through a flexible approach. This option emphasizes a developmental role rather than a protective one.