Question

State any three protective functions of Securities and Exchange Board of India.

Answer 1

The following are SEBI's protective functions:

1. Regulating insider trading and enforcing sanctions against it.
2. Taking action to safeguard investors.
3. Prohibition of unfair and misleading business practices.

Answer 2

SEBI ensures investor protection and securities market integrity. SEBI performs three protective roles.

1. Investor Protection: The Securities and Exchange Commission (SEC) regulates brokers, stock exchanges, and listed corporations to ensure open markets, fairness, and integrity. SEBI educates and informs investors about their rights, risks, and responsibilities.
2. Market surveillance: SEBI analyses trades for market manipulation, insider trading, and misconduct. SEBI detects and quickly regulates fraudulent transactions to protect investors and market efficiency.
3. Regulation Enforcement: The SEBI enforces compliance with industry ethics and securities law. The regulatory system punishes violators with fines and disciplinary procedures to prevent misconduct and promote responsibility in the securities industry.