Advertisements
Advertisements
Question
Answer each of these questions in about fifty words:
Who manages SEBI?
Solution
SEBI is managed by its members, which consists of following:
- Chairman who is nominated by Union Government of India.
- Two members, i.e. Officers from Union Finance Ministry.
- One member from Reserve Bank of India.
- The remaining 5 members are nominated by Union Government of India, out of them at least 3 shall be whole-time members.
APPEARS IN
RELATED QUESTIONS
The company has to obtain consent of ............................ if issue of debentures exceeds Rs. 1 crore.
- SEBI
- Registrar
- National Stock Exchange
Mr. Vikas Mehra was the Chairman of 'IBM Bank'. The Bank was earning good profits. Shareholders were happy as the bank was paying regular dividends. The market price of their shares was also steadily rising. The bank was about to announce the taking over of 'UK Bank'. Mr. Vikas Mehra knew that the share price of 'IBM Bank' would rise on this announcement. Being a part of the Bank, he was not allowed to buy shares of the bank. He called one of his rich friends Mukand and asked him to invest Rs 4 crores in shares of his bank promising him the capital gains. As expected after the announcement, the share prices went up by 50% and the market price of Mukand's shares was now Rs 6 crores. Mukand earned a profit of Rs 2 crores. He gave Rs 1 crore to Vikas Mehra and kept Rs 1 crore with him. On regular inspection and by conducting enquiries of the brokers involved, Securities and Exchange Board of India (SEBI) was able to detect this irregularity. SEBI imposed a heavy penalty on Vikas Mehra.
Quoting the lines from the above para identify and state any two functions performed by SEBI in the above case.
Mr. Aditya Gupta was the chairman of ‘Vandan Bank’. The Bank was earning good profits. Shareholders were happy as the bank was paying regular dividends. The market price of their shares was also steadily rising. The bank announced taking over of ‘Karur Bank’. Aditya Gupta knew that the share price of Vandan Bank would rise on this announcement. Being a part of the bank, he was not allowed to buy shares of the bank. He called one of his rich friends Nimesh and asked him to invest Rs 6 crores in the shares of his bank promising him the capital gain.
As expected, the share prices went up by 40% and the market price of Nimesh’s shares was now Rs 8.4 crores. He had earned a profit of Rs 2.4 crores. He gave Rs 1.2 crore to Mr. Aditya Gupta and kept Rs 1.2 crore with him. On regular inspection and by conducting enquiries of the brokers involved, Securities and Exchange Board of India (SEBI) was able to detect this irregularity. SEBI imposed a heavy penalty on Aditya Gupta. By quoting the lines from the above para identify and state any two functions that were performed by SEBI in the above case.
What are the objectives of SEBI?
Explain the objectives and functions of the SEBI.
Answer each of these questions in about fifteen words:
State three functions of SEBI rolled into one body.
Answer each of these questions in about one hundred and fifty words:
Explain the powers SEBI has been vested with for discharging of its functions efficiently.
Depository Participant
Select the correct answer from the options given below and rewrite the statement.
________ was established as a statutory body to regulate the securities market in India.
State whether the statement is true or false:
SEBI protects the interest of investors in securities market.
Attempt the following:
Write a reply to a complaint by an investor
‘MYKAA Limited ‘is dealing in all types of cosmetic products. It is enjoying increased demand for its product during the last few years. For the purpose of expansion the company needs ₹ 100 crores as additional capital. The company decides to raise funds through equity shares. Chirag Kapoor, the finance manager of the company recommended that the shares may be sold through issuing houses or brokers. Identify and explain the method recommended by Mr.Kapoor through which the company can raise additional funds for expansion purposes.
What are the objectives of the SEBI?
Which of the following is the regulatory function of SEBI?
What are the protective function of SEBI?
______ is a legally enforceable document and helps to settle disputes/claims between the investor and the broker. It contains details of the number of shares bought or sold, the price, the date and time of deal, and the brokerage charges.
Which of the following stands for SEBI?
The basic purpose of SEBI is to create an environment to facilitate efficient mobilisation and allocation of resources through the securities markets. Who are the constituents of this market for whom SEBI aims at creating a conducive environment?
Of the following sources of funds, ______ are not Borrowed Funds.
Assertion (A): Certificates of Deposit (CD) are secured, negotiable, long-term instruments in bearer form.
Reason (R): A rise in call money rates makes other sources of finance such as commercial paper and certificates of deposit cheaper in comparison as banks raise funds from these sources.
______ debt-equity ratio is preferred by the commercial banker over the years as it indicates financial strength of a unit.
Read the following text and answer the following question on the basis of the same:
Mr. A. Bose is running a successful business. Mr. Bose is the owner of R. K. Cement Ltd. Mr. Bose decided to expand his business by acquiring a Steel Factory. This required an investment of~ 60 crores. To seek advice in this matter, he called his financial advisor Mr. T. Ghosh who advised him about the judicious mix of equity (40%) and Debt (60%). Employ more of cheaper debt may enhance the EPS. Mr. Ghosh also suggested him to take loan from a financial institution as the cost of raising funds from financial institutions is low. Though this will increase the financial risk but will also raise the return to equity shareholders. He also apprised him that issue of debt will not dilute the control of equity shareholders. At the same time, the interest on loan is a tax-deductible expense for computation of tax liability. After due deliberations with Mr. Ghosh, Mr. Bose decided to raise funds from a financial institution.
In the above case Mr. Ghosh suggested to raised more funds from debt. Higher debt-equity ratio results in:
Zakira Ltd. wants to invest in treasury bills issued by RBI. What will be the minimum amount to be invested in Treasury Bill?
State any three objectives of the Securities Exchange Board of India.
'Due to various malpractices and multiplied investors grievances the Govt. of India decided to set up a separate regulatory body to protect the interest of investors and to regulate the securities market.'
- Identify the regulatory body set up by Govt. of India for the above-stated purpose.
- State any one objective of the regulatory body identified in (a) above.
STATEMENT I: Electronic holdings can be converted into physical certificates with the process of dematerialisation.
STATEMENT II: There is no danger of theft, loss or forgery of share certificates in dematerialisation.
Choose the correct option from the following:
