Q.Explain the protective functions of SEBI.

SEBI's protective functions are aimed squarely at shielding ordinary investors from the market's most common forms of misconduct.

SEBI's protective functions are those aimed directly at safeguarding the interests of investors:

1. Prohibits insider trading — trading by persons who possess unpublished price-sensitive information about a company (such as its own directors or employees) for personal gain, which gives them an unfair edge over other investors.
2. Prohibits fraudulent and unfair trade practices — including spreading misleading rumours and price rigging (artificially manipulating a security's price) to deceive investors.
3. Promotes fair practices and a code of conduct among stock brokers, merchant bankers and other market intermediaries.
4. Undertakes investor-education programmes — helping investors understand the risks of the securities market and make informed decisions. …

Confusing "protective" functions (aimed at investors) with "regulatory" functions (aimed at intermediaries/market structure) — insider trading and price ri …