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Questions
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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Solution
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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