Advertisements
Advertisements
प्रश्न
Answer the question in about fifty words:
What is SEBI and what is its role?
Advertisements
उत्तर १
The Securities and Exchange Board of India or SEBI is the regulator for the securities market in India.
Role of SEBI:
- It is a supervising and regulatory body to check certain malpractices and works for promoting the securities markets in India.
- It has three functions rolled into one body: quasi-legislative, quasi-judicial and quasi executive.
- It drafts regulations in its legislative capacity, it conducts investigation and enforcement action in its executive function and it passes rulings and orders.
उत्तर २
Meaning: -
Stock exchange is a specific place where trading of the securities is arranged in an organized method. In simple words, it is a place where shares, debentures, and bonds (securities) are purchased and sold. The term securities include equity shares, preference shares, debentures, government bonds, etc. including mutual funds.
The government of India established the market watchdog i.e. Securities Exchange Board of India (SEBI) IN April 1988.
SEBI as securities Exchange Board of India became a statutory body under SEBI Act, 1992, and its Head Office located in Mumbai. At present, SEBI have offices in Mumbai, Calcutta, New Delhi, and Chennai. SEBI consists of the following members.
- A Chairman
- Two members from the Ministries of the Central Government. Dealing with Finance and Law
- Two other members to be appointed by the Central Government.
In order to regulate and promote the capital market, SEBI performs the following Role.
- Regulating the business in stock exchanges and many other securities markets.
- Registering and regulating the working of stockbrokers, share transfer agents, sub-brokers, bankers to an issue, etc.
- Promoting and regulating self-regulatory organizations.
- Prohibiting fraudulent and unfair trade practices relating to the securities market.
- Registering and regulating the working of venture capital funds and collective investment schemes including mutual funds.
- Promoting Investor education and training of intermediaries of the securities market.
- Prohibiting insider trading in securities.
- Conducting research and carrying out publications.
- Calling for information, form undertaking inspection, conducting inquiries and audits of stock exchanges and market intermediaries.
APPEARS IN
संबंधित प्रश्न
Mr. Sanjay Nehra was the Chairman of 'Taran 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 taking over of 'Vena Bank.' Mr. Sanjay Nehra knew that the share price of 'Taran 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 Sudhir and asked him to invest Rs 5 crores in shares of his bank promising him the capital gains. As expected the share prices went up by 40% and the market price of Suhir's shares was now Rs 7 crores. He earned a profit of Rs 2 crores. He gave Rs 1 crore to Mr. Sanjay Nehra and kept Rs 1 crore with himself. On regular inspection and by conducting enquiries of the brokers involved, Securities and Exchange Board of India (SEBI) was able to detect this irregularity. The SEBI imposed a heavy penalty on Mr. Sanjay Nehra.
By quoting the lines from the above para identify and state any two functions that were 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.
State the protective functions of the Securities and Exchange Board of India.
Answer each of these questions in about fifteen words:
What is SEBI?
State any three Development functions of Securities and Exchange Board of India.
Write a word or a term or a phase which can substitute for the following:
Institution that regulates functioning of stock exchanges and intermediaries in the securities market.
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 | ______________ |
Attempt the following:
Write a reply to a complaint by an investor
Under which method, the securities are sold only to some selected individuals and big institutional investors rather than to the public.
______ is an institution or organisation, which holds securities in electronic form, in which trading is done.
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?
The Securities and Exchange Board of India was established by the Government of India and was given a statutory status in ______.
State the first development bank of the country
Which of the following is/are the 'Developmental Functions' of Securities and Exchange Board of India?
Of the following sources of funds, ______ are Owner's Funds.
______ debt-equity ratio is preferred by the commercial banker over the years as it indicates financial strength of a unit.
Read the following text and answer the following question on the basis of the same:
Mr. A. Bose is running a successful business. Mr. Bose is the owner of R. K. Cement Ltd. Mr. Bose decided to expand his business by acquiring a Steel Factory. This required an investment of~ 60 crores. To seek advice in this matter, he called his financial advisor Mr. T. Ghosh who advised him about the judicious mix of equity (40%) and Debt (60%). Employ more of cheaper debt may enhance the EPS. Mr. Ghosh also suggested him to take loan from a financial institution as the cost of raising funds from financial institutions is low. Though this will increase the financial risk but will also raise the return to equity shareholders. He also apprised him that issue of debt will not dilute the control of equity shareholders. At the same time, the interest on loan is a tax-deductible expense for computation of tax liability. After due deliberations with Mr. Ghosh, Mr. Bose decided to raise funds from a financial institution.
In the above case Mr. Ghosh suggested to raised more funds from debt. Higher debt-equity ratio results in:
Zakira Ltd. wants to invest in treasury bills issued by RBI. What will be the minimum amount to be invested in Treasury Bill?
State any three objectives of the Securities Exchange Board of India.
'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.'
- Identify the regulatory body set up by Govt. of India for the above-stated purpose.
- State any one objective of the regulatory body identified in (a) above.
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?
SEBI regulates the prices of the securities listed in the market.
