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'Due to various malpractices and multiplied investors grievances the Govt. of India decided to set up a separate regulatory body to protect the interest of investors

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प्रश्न

'Due to various malpractices and multiplied investors grievances the Govt. of India decided to set up a separate regulatory body to protect the interest of investors and to regulate the securities market.'

  1. Identify the regulatory body set up by Govt. of India for the above-stated purpose.
  2. State any one objective of the regulatory body identified in (a) above.
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उत्तर

  1. SEBI (Securities and Exchange bound of India).
  2. Objectives of SEBI: The overall objective of SEBI is to protect the interests of investors and to promote the development of, and regulate the securities market. This may be elaborated as follows:
    (i) To regulate stock exchanges and the securities industry to promote their orderly functioning.
    (ii) To protect the rights and interests of investors, particularly individual investors and to guide and educate them.
    (iii) To prevent trading malpractices and achieve a balance between self-regulation by the securities industry and its statutory regulation.
    (iv) To regulate and develop a code of conduct and fair practices by intermediaries like brokers, merchant bankers, etc., with a view to making them competitive and professional.
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2021-2022 (March) Term 2 - Delhi Set 1

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संबंधित प्रश्न

Mr. Vikas Mehra was the Chairman of 'IBM Bank'. The Bank was earning good profits. Shareholders were happy as the bank was paying regular dividends. The market price of their shares was also steadily rising. The bank was about to announce the taking over of 'UK Bank'. Mr. Vikas Mehra knew that the share price of 'IBM Bank' would rise on this announcement. Being a part of the Bank, he was not allowed to buy shares of the bank. He called one of his rich friends Mukand and asked him to invest Rs 4 crores in shares of his bank promising him the capital gains. As expected after the announcement, the share prices went up by 50% and the market price of Mukand's shares was now Rs 6 crores. Mukand earned a profit of Rs 2 crores. He gave Rs 1 crore to Vikas Mehra and kept Rs 1 crore with him. On regular inspection and by conducting enquiries of the brokers involved, Securities and Exchange Board of India (SEBI) was able to detect this irregularity. SEBI imposed a heavy penalty on Vikas Mehra.

Quoting the lines from the above para identify and state any two functions performed by SEBI in the above case.


Mr. Aditya Gupta was the chairman of ‘Vandan Bank’. The Bank was earning good profits. Shareholders were happy as the bank was paying regular dividends. The market price of their shares was also steadily rising. The bank announced taking over of ‘Karur Bank’. Aditya Gupta knew that the share price of Vandan Bank would rise on this announcement. Being a part of the bank, he was not allowed to buy shares of the bank. He called one of his rich friends Nimesh and asked him to invest Rs 6 crores in the shares of his bank promising him the capital gain.

As expected, the share prices went up by 40% and the market price of Nimesh’s shares was now Rs 8.4 crores. He had earned a profit of Rs 2.4 crores. He gave Rs 1.2 crore to Mr. Aditya Gupta and kept Rs 1.2 crore with him. On regular inspection and by conducting enquiries of the brokers involved, Securities and Exchange Board of India (SEBI) was able to detect this irregularity. SEBI imposed a heavy penalty on Aditya Gupta. By quoting the lines from the above para identify and state any two functions that were performed by SEBI in the above case.


What are the objectives of SEBI?


Explain the objectives and functions of the SEBI.


Answer each of these questions in about fifteen words

What do you understand by private placement?


Answer each of these questions in about fifteen words:

What is SEBI?


State whether the statement is true or false:
SEBI protects the interest of investors in securities market.


Select the correct option form the bracket.

Group ‘A’ Group ‘B’
Regulator of Securities Market ______________

‘MYKAA Limited ‘is dealing in all types of cosmetic products. It is enjoying increased demand for its product during the last few years. For the purpose of expansion the company needs ₹ 100 crores as additional capital. The company decides to raise funds through equity shares. Chirag Kapoor, the finance manager of the company recommended that the shares may be sold through issuing houses or brokers. Identify and explain the method recommended by Mr.Kapoor through which the company can raise additional funds for expansion purposes.


Under which method, the securities are sold only to some selected individuals and big institutional investors rather than to the public.


Rishu's friend Devina works as a Finance Manager in Perfect Solutions Ltd. Devina in a meeting with the directors of the company came to know that the firm would soon be declaring a bonus issue which would lead to an increase in the price of shares. On this basis, Devina advised Rishu to purchase the shares of Perfect Solutions Ltd., who thus bought the shares. SEBI can control malpractices like these through which of the following functions:


The basic purpose of SEBI is to create an environment to facilitate efficient mobilisation and allocation of resources through the securities markets. Who are the constituents of this market for whom SEBI aims at creating a conducive environment?


Which of the following is not a Protective Function performed by SEBI?


Which of the following is/are the 'Developmental Functions' of Securities and Exchange Board of India?


Which of the following is not a function of Securities and Exchange Board of India (SEBI)?


SEBI calls for information and issues a show cause notice to stock exchange and its officials seeking explanation and conducting audit and enquiry. Which function is SEBI performing?


When did SEBI become a statutory body, and under which Act?


What is SEBI's broad role in the securities market in India?


Why is SEBI called the watchdog of the Indian securities market?


Which protective function directly concerns investors?


What does SEBI educate investors about?


Which activities does SEBI allow to encourage capital market development?


Which entities does SEBI register and regulate?


Between whom do stock brokers act as intermediaries?


Which set gives examples of merchant bankers?


What does an investor submit when opening a demat account with a DP?


Which risks involving share certificates does the depository system eliminate?


What does the depository system enable regarding ownership?


Which symbols may credit rating agencies assign?


How do credit rating agencies help investors make informed decisions?


What do credit rating agencies monitor, and what do they promote among borrowers?


Why does SEBI regulate and monitor credit rating agencies?


Which is the oldest mutual fund in India?


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