Question

What are the protective function of SEBI?

Options

• Prohibition

• Checks on Insider Trading

• Promotion and Protection

• All of the above

Answer 1

All of the above

Explanation -

Protective Functions:

• Prohibition: SEBI prohibits fraudulent and unfair trade practices. It prevents the spreading of misleading and manipulative statements which are likely to affect the working of the securities market. SEBI educates the investors by providing them valuable information regarding various securities and companies So as to enable them to make wise investment decisions.
• Checks on Insider Trading : Insider trading refers to a situation. where an individual connected with the company leaks out crucial information regarding the company. Such information may adversely affect its share prices. SEBI keeps a strict cheek on such insider trading.
• Promotion and Protection : SEBI encourage fair trade practices and promotes a code of conduct for the intermediaries. It undertakes step for investor protection and education. It also checks the manipulation of price of securities.