Business Studies

Question

State the objectives of Securities and Exchange Board Of India?

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Studies Tanya Dhamija 4 months 2 Answers 58 views Bronze 0

Answers ( 2 )

  1. The main objectives of SEBI are:

    1. Regulation of Stock exchanges.
    2. Protection to Investors.
    3.Control over Brokers.
    4. Check on Insider Training.

  2. The main objectives of SEBI are:-
    1) Investor protection-
    Without active investors, the capital market is worthless. For that reason, it is essential to safeguard the interests of the investors. The protection of the interests of investors implies shielding them from erroneous information provided by the businesses, lowering the likelihood of default, etc. Thus, the top objective of the SEBI (Securities And Exchange Board of India) is to offer security to the investors.
    2) Regulation of Stock Markets-
    SEBI regulates the stock markets to ensure that effective services are offered to all the parties involved like brokers, merchant bankers, and other intermediaries to promote professionalism. Moreover, it also has to ensure fair practices.
    3) Checking for Insider Trading-
    Insider trading means the trading of a company’s securities by individuals (like directors, promoters, etc) with access to non-public information about the company. These people have access to secret information about the company. This harms the interests of the common investors. In a number of countries insider trading is illegal. The reason being that it is unfair to other investors who do not have access to the information. Quite a few steps have already been taken to check insider trading by SEBI.
    4) Control over Financial Intermediaries-
    It is essential to keep close track of the activities of the brokers and other intermediaries in order to regulate the capital markets. Since its creation, SEBI (Securities And Exchange Board of India) has been working towards the achievement of its objectives with commendable zeal. The advancements in the securities markets like capitalization requirements, margining, establishment of clearing organizations etc. has decreased the risk of default. In a nutshell, we can say that the objectives of SEBI are to protect the investors, regulate stock exchanges & financial intermediaries and encourage healthy growth and development of capital market in India.

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