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Question
Justify the following statement.
All sorts of unfair practices related to stock exchange should be avoided.
Answer in Brief
Solution
- The persons who provide finance for the short term as well as for the long term to the company are called owners or investors. They invest their money and accept the risk factors. Management is expected to provide full and factual information about the financial performance of the company to the owners and investors.
- The Securities and Exchange Board of India (SEBI) plays a pivotal role in regulating and maintaining the interests of investors in the securities market. Law prohibits any sort of activity that is manipulative or unfair in the securities market. Thus, business organizations must avoid unfair practices related to stock exchange like insider trading providing wrong and secret information about buying/selling or dealing with securities, etc. Any breach in the above-mentioned practices may be considered unlawful and be made accountable by SEBI.
- Therefore, a business organization should consider responsibilities toward the owners and should avoid all sorts of unfair practices related to the stock exchange.
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Responsibilities Towards Different Interest Groups - Responsibilities Towards Consumers
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