What is the role of the Securities and Exchange Board of India?
- To promote individual businesses.
- Facilitating credit flow for promotion and development of agriculture, cottage, and village industries.
- The custodian of the foreign reserve, controller of credit, and managing printing and supply of currency notes in the country.
- Protect the interests of investors in securities.
Answer: d. Protect the interests of investors in securities
Answer Explanation
The correct answer is D) Protect the interests of investors in securities. Securities and Exchange Board of India (SEBI) plays a crucial role in safeguarding the interests of investors in securities. It is the responsibility of SEBI to oversee and regulate the Indian securities market, and it places a high priority on investor protection.
SEBI’s role in protecting investors’ interests:
Regulatory Framework: SEBI formulates and enforces rules, regulations, and guidelines to ensure fair practices and transparency in the securities market. Its mandate is to protect investors from unfair practices, market manipulations, and frauds.
Disclosure Requirements: SEBI mandates listed companies to provide timely and accurate information to investors via disclosures and periodic reports. This ensures that investors have access to all relevant information.
Preventing Insider Trading: SEBI has strict regulations to prevent insider trading, which refers to the use of non-public information by individuals in order to gain an unfair advantage. In order to ensure an equal playing field for all investors, SEBI prohibits insider trading.
Prohibition of Market Manipulation: SEBI actively monitors and investigates market manipulation, such as price rigging and false rumors, to protect investors from artificial price movements.
Education of investors: SEBI conducts various investor education programs to enhance financial literacy and awareness among the public. By educating investors about market risks and investment opportunities, SEBI empowers them to make informed decisions regarding their investments.
Why the other options are not correct
a. To promote individual businesses:
SEBI’s primary role is not to promote individual businesses. Although SEBI’s regulations and oversight aim to ensure a conducive environment for businesses to raise capital on the securities market, its main focus is to ensure investors’ interests are protected.
b. Facilitating credit flow for the promotion and development of agriculture, cottages, and villages industries:
NABARD (National Bank for Agriculture and Rural Development) and other financial institutions facilitate credit flows for the promotion and development of agriculture, cottage, and village industries. The sole purpose of SEBI is to protect investor interests and regulate the securities market.
c. The custodian of the foreign reserves, controller of credit, and managing printing and supply of currency notes in the country:
These functions are primarily the responsibility of the Reserve Bank of India (RBI), the central bank of the country. Currency management and foreign reserve management are not part of SEBI’s responsibilities or authority.
Conclusion
In conclusion, the correct answer is D) Protect the interests of investors in securities. The Securities and Exchange Board of India (SEBI) plays a crucial role in regulating the securities market and ensuring investor protection. SEBI fosters investor confidence and promotes market integrity by implementing robust regulations, promoting transparency, and taking proactive measures to maintain market integrity.
When was SEBI established in India?
I am Bibisha Shiwakoti a final year BBS student from Janapremi College. I have completed my higher secondary education at Kalinchowk Secondary School.
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