Gujarat BoardEnglish MediumSTD 12 CommerceOCMFINANCIAL MARKET5 Marks
Question
Discuss the functions of $SEBI.$
✓
Answer
Functions of $SEBI:$
$1.$ To regulate business in stock exchange:
$SEBI$ regulates the business in stock exchanges and the operations of the stock exchanges. It monitors whether the specified rules and guidelines are followed or not by share brokers, sub-brokers, merchant bankers.
It keeps an effective control on the entire working of the stock exchanges.
$2.$ Protection of the interest of the investors:
The fundamental function of the $SEBI$ is to protect the interest of the investors. So, it enforces the intermediaries to obey the specified rules and regulations.
$3.$ Registration and regulation of intermediaries:
It registers the intermediaries such as merchant banker, share broker, sub-broker, registrar of securities, etc. working in stock exchange and monitors their functions.
It plans for the training of intermediaries.
$4.$ Registration and regulation of mutual funds:
It registers and monitors mutual funds and regulates their working. For this, $SEBI$ has determined rules and regulations which are followed by mutual funds.
$5.$ To prevent fraudulent trade:
It takes necessary steps to prohibit fraudulent trade in stock exchanges.
$6.$ To cancel registration of brokers:
It cancels the registration of share brokers who do not follow rules and guidelines determined by $SEBI$ and who fail to provide necessary information to $SEBI.$
$7.$ To regulate the merger and take-over of the companies:
It regulates merger and take-over of the companies for preserving the interest of investors. $SEBI$ has issued guidelines so that merger and take-over do not take place at the risk of small investors. .
$8.$ Guidelines with reference to public issues:
$SEBI$ has issued different guidelines for both, first time capital issue by new company and capital issue by existing company coming in market for capital.
$9.$ Self-regulation:
$SEBI$ is active for the self-regulation followed by intermediaries of stock exchange. It encourages the intermediaries to promote their professional unions.
$10.$ Maintaining stock exchanges as an efficient market:
It maintains stability and efficiency of stock exchanges through regulations, restrictions and guidelines.
$11.$ Inspection of books:
If necessary, it inspects the books of company that issues securities, depository participant and beneficiary owner.
$12.$ Monitoring and inspection of stock exchange:
$SEBI$ can monitor and inspect whether regulations laid down for stock exchange are followed or not, whether stock exchange organization system and its working is followed as per $SEBI$ Act or not.
If necessary, it conducts inquiry, inspection and audit of the accounts of the intermediaries.
$13.$ Guidelines:
$SEBI$ has issued guidelines time to time for share brokers, and sub-brokers, merchant bankers, trustees of debenture, buy back securities by company, etc.
$14.$ To obtain annual and periodical reports:
It receives report in form of various statements for obtaining information about working and activities of stock exchanges.
$15.$ Research work:
$SEBI$ undertakes the research work so that all the above functions can be done effectively.
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