Q.Explain the objectives and functions of SEBI.

SEBI, the Securities and Exchange Board of India, was established in 1988 and became a statutory body under the SEBI Act, 1992. Its objectives are to protect the interests of investors, to promote the orderly development of the securities market, and to regulate it. Its functions fall into three groups — protective, developmental and regulatory. ## Meaning The Securities and Exchange Board of India (SEBI) is the regulatory authority of the Indian securities (capital) market. It was formed in 1988 and given statutory powers by the SEBI Act, 1992, with its head office in Mumbai. ## Objectives of SEBI 1. To protect the interests of investors in securities so that they invest with confidence. 2. To promote the development of the securities market in a fair and orderly manner. 3. To regulate the working of the stock exchanges and the intermediaries operating in the market. 4. To prevent malpractices such as fraud, price rigging and insider trading. 5. To balance the interests of investors, companies issuing securities, and market intermediaries. ## Functions of SEBI A. Protective Functions — aimed at safeguarding investors: - Prohibiting fraudulent and unfair trade practices. - Prohibiting insider trading in securities. - Controlling price rigging. - Promoting fair practices and a code of conduct in the securities market. - Undertaking investor education. B. Developmental Functions — aimed at growing the market: - Training intermediaries of the securities market. - Promoting investor education and research. - Allowing stock exchanges to make flexible arrangements and promoting self-regulatory organisations. - Facilitating modern market practices such as electronic/online trading and dematerialisation. C. Regulatory Functions — aimed at orderly conduct: - Registering and regulating brokers, sub-brokers, merchant bankers, underwriters, share-transfer agents and other intermediaries. - Registering and regulating the working of mutual funds and collective investment schemes. - Regulating takeovers and acquisitions of companies. - Conducting inquiries, audits and inspections of stock exchanges and intermediaries. - Framing rules and levying fees. Through these objectives and functions SEBI keeps the capital market transparent and trustworthy, which is the core idea tested in this AP Intermediate 2nd-year Commerce previous-yea …