Q.'Calling for information by undertaking inspection, conducting enquiries and audits of stock exchanges and intermediaries' is ________ of Securities and Exchange Board of India. (A) Regulatory Function (B) Development Function (C) Protective Function (D) Both (B) and (C)

Showing the 12 most recent of 16 on this concept.

1. CBSE 2026Set 66/3/11 markMCQ
   Q.Shikha, a first-time investor, was excited yet nervous about investing in the stock market as she felt it was risky. She sought guidance from her friend, Rama, who was an experienced investor. Rama assured Shikha that it is safe to invest in the stock market as the membership of stock exchange is regulated by Securities and Exchange Board of India (SEBI). She also told Shikha that SEBI performs various functions to protect the rights and interests of investors. Which of the following functions mentioned by Rama is not a protective function of SEBI ? (A) Prohibition of fraudulent and unfair trade practices like making misleading statements, manipulations, price rigging, etc. (B) Conducting research and publishing information useful to all market participants. (C) Controlling insider trading and imposing penalties for such practices. (D) Promotion of fair practices and code of conduct in the securities market.

   ›Reveal solutionSolution

   Conducting research and publishing information is a developmental function of SEBI, not a protective one, as it aims to improve the market's overall efficiency and knowledge base.

   The Securities and Exchange Board of India (SEBI) plays a crucial role in regulating the Indian securities market. Its primary objective is to protect the interests of investors, promote the development of the securities market, and regulate its functioning. For a first-time investor like Shikha, understanding SEBI's role is fundamental to building confidence in the market, as its regulations are designed to ensure fairness and transparency.

   SEBI performs a wide array of functions, which can broadly be categorised into three types: Regulatory, Developmental, and Protective. These categories help us understand the different facets of SEBI's mandate and how it contributes to a healthy financial ecosystem.

   Regulatory Functions are those that SEBI performs to regulate the business in stock exchanges and the securities market. These include registering brokers, sub-brokers, share transfer agents, merchant bankers, and other intermediaries, as well as regulating their operations. SEBI also registers and regulates mutual funds, prohibits fraudulent and unfair trade practices, and regulates takeovers of companies. Essentially, these functions establish the rules of the game.

   Developmental Functions are those that SEBI performs to promote and develop the securities market. This involves training intermediaries of the securities market, conducting research, and publishing information useful to all market participants. It also includes promoting self-regulatory organisations and educating investors. These functions aim to improve the efficiency and understanding of the market for everyone involved.

   Protective Functions are perhaps the most directly relevant to an investor like Shikha, as they are specifically designed to safeguard investor interests and maintain the integrity of the market. These functions aim to prevent malpractices and ensure that all market participants operate ethically and transparently.

   Let's examine the options provided in the context of these functions:

   • (A) Prohibition of fraudulent and unfair trade practices like making misleading statements, manipulations, price rigging, etc. This is a quintessential protective function. By prohibiting such practices, SEBI directly shields investors from being cheated or misled, ensuring a fair playing field.
   • (B) Conducting research and publishing information useful to all market participants. This falls under developmental functions. While providing information can indirectly help investors make informed decisions, its primary goal is to enhance market knowledge and efficiency for all participants, rather than directly protecting an investor from a specific harmful act or malpractice. It's about market growth and education. …

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2. CBSE 2026Set MARCH1 markMCQ
   Q.Under which act, SEBI came into existence?

   (a) (A) Companies Act

   (b) (B) Securities contracts (Regulation Act)

   (c) (C) National Companies Act

   (d) (D) Securities and Exchange Board of India Act (SEBI Act)

   ›Reveal solutionSolution

   SEBI came into (statutory) existence under the SEBI Act, 1992.

   This GSEB Class-12 Commerce question tests SEBI's legal basis. SEBI was established administratively in 1988 and was given statutory status by the SEBI Act, 1992. It regulates the secu …

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3. CBSE 2026Set MARCH1 mark
   Q.With whom foreign investment institution has to register itself?

   ›Reveal solutionSolution

   Foreign investment institutions register with SEBI.

   In this GSEB Class-12 Commerce question, foreign investment institutions (FIIs/FPIs) that wish to invest in Indian securities must obtain registration from SEBI, which regul …

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4. CBSE 2025Set 66/4/11 markMCQ
   Q.'Calling for information by undertaking inspection, conducting enquiries and audits of stock exchanges and intermediaries' is ________ of Securities and Exchange Board of India. (A) Regulatory Function (B) Development Function (C) Protective Function (D) Both (B) and (C)

   ›Reveal solutionSolution

   The activity of calling for information, undertaking inspections, conducting enquiries, and audits of market participants is a Regulatory Function of the Securities and Exchange Board of India (SEBI).

   To understand why the described activity falls under a specific function of SEBI, we must first appreciate the role of financial markets and the necessity of a robust regulatory body like SEBI. Financial markets are crucial for economic growth, acting as a channel for savings to be converted into investments. For these markets to function efficiently and fairly, they require oversight to protect investors, ensure orderly conduct, and promote development. This is precisely where SEBI steps in.

   The Securities and Exchange Board of India (SEBI) was established in 1988 and given statutory powers in 1992 to protect the interests of investors in securities, promote the development of the securities market, and regulate the market. To achieve these broad objectives, SEBI performs a variety of functions, which are generally categorised into three main types: Regulatory, Development, and Protective.

   Let's break down these functions:

   • Regulatory Functions: These are the functions SEBI performs to regulate the business in stock exchanges and other securities markets. They are about setting rules, monitoring compliance, and ensuring the orderly functioning of the market. This category includes:

     • Registering and regulating stockbrokers, sub-brokers, share transfer agents, merchant bankers, and other intermediaries.
     • Registering and regulating collective investment schemes, including mutual funds.
     • Regulating takeovers of companies.
     • Prohibiting fraudulent and unfair trade practices.
     • Calling for information by undertaking inspection, conducting enquiries and audits of stock exchanges and intermediaries. This is a direct mechanism for SEBI to monitor compliance, detect irregularities, and ensure that market participants adhere to the established rules and regulations. It's about active oversight and enforcement.
     • Levying fees or other charges for carrying out the purposes of the Act.
     • Performing and exercising such powers under the Securities Contracts (Regulation) Act, 1956, as may be delegated to it by the Government of India.

   • Development Functions: These functions aim to promote and develop the securities market. They focus on improving the market's efficiency, infrastructure, and participant knowledge. Examples include:

     • Promoting investor education and training of intermediaries.
     • Conducting research and publishing information useful to all market participants.
     • Promoting self-regulatory organisations. …

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5. CBSE 2025Set ANNUAL1 markMCQ
   Q.Legally SEBI was established in (A) 1988 (B) 1990 (C) 1992 (D) 1994

   ›Reveal solutionSolution

   SEBI became a statutory (legally empowered) body in 1992 through the SEBI Act.

   The Securities and Exchange Board of India (SEBI) was first constituted in 1988 as an administrative, non-statutory body to regulate the securities market. It did not have legal enforcement powers at that stage. It acquired statutory status in 1992 when the SEBI Act, 1992 was enacted, which gave it legal authority to protect investors and regulate the stock market. Because …

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6. CBSE 2025Set HY1 mark
   Q.What does S.E.B.I. mean?

   ›Reveal solutionSolution

   S.E.B.I. stands for the Securities and Exchange Board of India.

   SEBI is the statutory regulatory authority for India's securities market, responsible for protecting the interests of investors, regulating the issue of shares/debentures by companies, and overseeing stock exchanges and oth …

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7. CBSE 2024Set MARCH1 markMCQ
   Q.With whom have the foreign investment institution got registered?

   (a) Company register

   (b) Court

   (c) Stock exchange

   (d) SEBI

   ›Reveal solutionSolution

   Foreign investment institutions are registered with SEBI.

   The Securities and Exchange Board of India (SEBI) regulates and develops India's securities market and protects investors. Foreign Institutional Investors (FIIs) that wish to invest in Indian securities must first get themselves regi …

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8. CBSE 2024Set ANNUAL1 mark
   Q.Answer in one sentence : What is the full form of SEBI?

   ›Reveal solutionSolution

   SEBI = Securities and Exchange Board of India.

   SEBI, the Securities and Exchange Board of India, is the statutory body that regulates and develops the securities (capital) market in India and protects the interests of investors. It was set up in 1988 and given statutory powers by the SEBI Act, 1992. This is a standard recall item in the Financial Markets chapter of the CHSE Odish …

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9. CBSE 2024Set ANNUAL1 markMCQ
   Q.Regional office of SEBI is situated in (A) Delhi (B) Kolkata (C) Chennai (D) All of these

   ›Reveal solutionSolution

   SEBI's regional offices include Delhi, Kolkata and Chennai, so the answer is (D) All of these.

   The Securities and Exchange Board of India (SEBI) protects investors and regulates the securities market. Besides its head office, it operates through regional offices in different parts of the country, including the northern (Delhi), eastern (Kolkata) and southern (Chennai) regions. Since regional offices exist in all the listed cities, the inclusive op …

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10. CBSE 2023Set 66/2/11 markMCQ
    Q.Which of the following is not a function of Securities and Exchange Board of India (SEBI) ? (A) Training of intermediaries of the securities market (B) Controlling insider trading (C) Registration of brokers and sub-brokers and other players in the market (D) Pricing of securities

    ›Reveal solutionSolution

    SEBI's role is to regulate and develop the securities market, protect investors, and ensure fair practices, but it does not determine the pricing of securities, which is left to market forces.

    The financial market serves as a crucial link between savers and investors, facilitating the flow of capital in an economy. Within this market, the securities market, comprising stock exchanges and other platforms, allows for the buying and selling of financial instruments like shares and debentures. For such a market to function efficiently, transparently, and fairly, robust regulation is indispensable. This is where the Securities and Exchange Board of India (SEBI) comes into play. Established in 1988 and given statutory powers in 1992, SEBI's primary objective is to protect the interests of investors in securities and to promote the development of, and regulate, the securities market.

    SEBI's functions can broadly be categorised into three types: protective, regulatory, and developmental. These categories highlight the comprehensive nature of its mandate to ensure a healthy and trustworthy capital market.

    Protective Functions: These functions are geared towards safeguarding the interests of investors and ensuring fair play in the market.

    • Prohibiting Fraudulent and Unfair Trade Practices: SEBI works to prevent activities like making misleading statements, manipulating prices, or spreading false information that could harm investors.
    • Controlling Insider Trading: Insider trading involves individuals with access to confidential, price-sensitive information using it to make personal gains. SEBI prohibits and penalises such activities to ensure a level playing field for all investors.
    • Educating Investors: SEBI undertakes initiatives to educate investors about their rights, responsibilities, and the risks associated with investing in the securities market, empowering them to make informed decisions.
    • Promoting Fair Practices: It strives to ensure that all market participants adhere to ethical standards and fair business practices.

    Regulatory Functions: These functions involve setting rules and regulations for the orderly functioning of the market and its participants.

    • Registration of Market Intermediaries: SEBI mandates the registration of various entities operating in the securities market, such as brokers, sub-brokers, merchant bankers, registrars to an issue, share transfer agents, and portfolio managers. This ensures that only legitimate and qualified entities operate.
    • Regulating Collective Investment Schemes: Schemes like mutual funds, which pool money from multiple investors, are regulated by SEBI to protect the interests of unit holders.
    • Regulating Stock Exchanges and Self-Regulatory Organisations: SEBI oversees the operations of stock exchanges and other self-regulatory bodies to ensure they function efficiently and fairly.
    • Regulating Takeovers of Companies: It lays down guidelines for substantial acquisition of shares and takeovers of companies to protect the interests of minority shareholders.
    • Conducting Inquiries and Audits: SEBI has the power to conduct inquiries and audits of stock exchanges and intermediaries to ensure compliance with regulations.

    Developmental Functions: These functions aim at promoting the growth and efficiency of the securities market.

    • Training of Intermediaries: SEBI organises and promotes training for intermediaries of the securities market to enhance their professionalism and efficiency. …

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11. CBSE 2023Set ANNUAL1 markMCQ
    Q.Head office of SEBI is in (A) Chennai (B) Mumbai (C) Delhi (D) Kolkata

    ›Reveal solutionSolution

    SEBI's head office is in Mumbai.

    The Securities and Exchange Board of India (SEBI) is the statutory body that regulates and develops India's securities market and protects investors. Its head office is located in Mumbai, the country's financial capital, with reg …

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12. CBSE 2023Set ANNUAL1 markMCQ
    Q.SEBI is (A) Securities and Earning Board of India (B) Securities and Exchange Board of India (C) Safety and Exchange Board of India (D) Safety and Earning Board of India

    ›Reveal solutionSolution

    The correct option is (B) Securities and Exchange Board of India, the statutory body that regulates the securities market.

    SEBI stands for the Securities and Exchange Board of India. It was established to protect the interests of investors, to develop the securities market, and to regulate it, including controlling stock exchanges and intermediaries. Knowing this exact full form is a standard one-mark point in the BSEB Inter Business Studies paper.

    …

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