Q.(a) Explain the functions of SEBI.

(a) SEBI's functions are protective, regulatory and developmental — protecting investors, regulating the securities market, and developing it. (b) A valid contract of sale needs two parties, goods, transfer of ownership, a money price, the essentials of a valid contract, and may be absolute or conditional.

(a) Functions of SEBI

The Securities and Exchange Board of India (SEBI) performs three broad categories of functions:

Protective functions (to protect investors):

• Prohibiting fraudulent and unfair trade practices.
• Checking insider trading in securities.
• Prohibiting price rigging.
• Educating investors and promoting fair practices and a code of conduct.

Regulatory functions (to regulate the market):

• Registering and regulating brokers, sub-brokers, merchant bankers and other intermediaries.
• Registering and regulating mutual funds and collective investment schemes.
• Regulating the working of stock exchanges and takeovers of companies.
• Framing rules and regulations and conducting inquiries and audits.

Developmental functions (to develop the market):

• Investor education and training of intermediaries.
• Promoting fair, flexible and efficient trading practices.
• Conducting research and encouraging self-regulating organisations.

(b) Essential Elements of a Contract of Sale

Under the Sale of Goods Act, 1930, a valid contract of sale must have:

1. Two parties – there must be a buyer and a seller, who are different persons (one cannot buy one's own goods).
2. Goods – the subject matter must be movable goods (existing, future or contingent); it excludes money and actionable claims.
3. Transfer of property (ownership) – the seller must transfer or agree to transfer the ownership of the goods to the buyer, not merely possession. …