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प्रश्न
State the protective functions of the Securities and Exchange Board of India.
State any three protective functions of the Securities and Exchange Board of India.
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उत्तर
The following are the protective functions of SEBI:
- Prohibition: SEBI prohibits fraudulent and unfair trade practices. In addition, it prevents the spreading of misleading statements, which are likely to affect the functioning of the securities market.
- Checks on insider trading: Insider trading refers to a situation wherein an individual connected with the company leaks out crucial information regarding the company, which may adversely affect its share prices. SEBI keeps a strict check on such practices.
- Promotion: SEBI encourages fair trade practices and promotes a code of conduct for the intermediaries to assist fair trade.
- Protection: SEBI undertakes various steps and protective measures to protect the interests of the investors in the financial markets.
- Controlling: The controlling of insider trading and imposing penalties for such practices.
Notes
Students should refer to the answer according to their questions.
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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.
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