Explain the objectives and functions of | Class 12 Business Studies Chapter Financial Markets, Financial Markets NCERT Solutions

Welcome to the NCERT Solutions for Class 12 Business Studies - Chapter Financial Markets. This page offers a step-by-step solution to the specific question from Exercise 3, Question 3:

Explain the objectives and functions of the SEBI.

. With detailed answers and explanations for each chapter, students can strengthen their understanding and prepare confidently for exams. Ideal for CBSE and other board students, this resource will simplify your study experience.

Question 3:

Explain the objectives and functions of the SEBI.

Answer:

The Securities and Exchange Board of India (SEBI) was established by the Government of India on 12th April, 1988 with an objective to protect the interest of investors and to promote the development of and regulate the securities market.

The SEBI has many objectives, some of them are discussed below:

  1. To regulate stock exchange and securities industry to promote their orderly functioning.
  2. To protect the rights and interests of investors, particularly individual investors and to guide and educate them.
  3. Top revent trading malpractices and achieve balance between self- regulation by the securities industry and its statutory regulation.
  4. To regulate and develop a code of conduct for intermediaries with a view to make them competitive and professional.

Functions of SEBI are discussed below:

1. Regulatory Functions

  • Registration of brokers, sub-brokers and other players in the market.
  • Registration of collective investment schemes and mutual funds.
  • Regulation of stock brokers, portfolio exchanges, underwriters and merchant bankers and the business in stock exchanges.
  • Regulation of takeover bids by companies.
  • Levying fee or other charges for carrying out the purposes of the Act.
  • SEBI conducts inspections, enquiries and audits of stock exchanges.
  • Perform and exercise such power under Securities Contracts (Regulation) Act 1965, as may be delegated by the Government of India.

2. Development Functions

  • Training of intermediaries of the securities market.
  • Conducting research and publishing information useful to all market participants.
  • Undertaking measures to develop the capital markets by adopting a flexible approach.

3. Protective Functions

  • Prohibition of fraudulent and unfair trade practices.
  • Controlling insider trading and imposing penalties for such practices.
  • Undertaking steps for investor protection.
  • Promotion of fair practices and code of conduct in securities market.


Study Tips for Answering NCERT Questions:

NCERT questions are designed to test your understanding of the concepts and theories discussed in the chapter. Here are some tips to help you answer NCERT questions effectively:

  • Read the question carefully and focus on the core concept being asked.
  • Reference examples and data from the chapter when answering questions about Financial Markets.
  • Review previous year question papers to get an idea of how such questions may be framed in exams.
  • Practice answering questions within the time limit to improve your speed and accuracy.
  • Discuss your answers with your teachers or peers to get feedback and improve your understanding.

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Welcome to the NCERT Solutions for Class 12 Business Studies - Chapter . This page offers a step-by-step solution to the specific question from Excercise 3 , Question 3: Explain the objectives and functions of the SEBI.....

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