Comprehension
SEBI was established as India’s principal capital markets regulator with the aim to protect the interest of investors in securities and promote the development and regulation of the securities market in India. SEBI is empowered to regulate the securities market in India by the SEBI Act 1992, the SCRA and the Depositories Act 1996. SEBI’s powers to regulate the securities market are wide and include delegated legislative, administrative, and adjudicatory powers to enforce SEBI’s regulations. SEBI exercises its delegated legislative power by inter alia framing regulations and appropriately amending them to keep up with the dynamic nature of the securities’ market. SEBI has issued a number of regulations on various areas of security regulation which form the backbone of the framework governing the securities market in India.
Section 11 of the SEBI Act lays down the functions of SEBI and expressly states that it “shall be the duty of the Board to protect the interests of investors in securities and to promote the development of, and to regulate the securities market, by such measures as it thinks fit”. Further, Section 30 of the SEBI Act empowers SEBI to make regulations consistent with the Act. Significantly, while framing these regulations, SEBI consults its advisory committees consisting of domain experts, including market experts, leading market players, legal experts, technology experts, retired Judges of this Court or the High Courts, academicians, representatives of industry associations and investor associations. During the consultative process, SEBI also invites and duly considers comments from the public on their proposed regulations. SEBI follows similar consultative processes while reviewing and amending its regulations.
(Extracted, with edits and revision, from the judgement in Vishal Tiwari v. Union of India, [2024] 1 S.C.R. 171)
Section 11 of the SEBI Act lays down the functions of SEBI and expressly states that it “shall be the duty of the Board to protect the interests of investors in securities and to promote the development of, and to regulate the securities market, by such measures as it thinks fit”. Further, Section 30 of the SEBI Act empowers SEBI to make regulations consistent with the Act. Significantly, while framing these regulations, SEBI consults its advisory committees consisting of domain experts, including market experts, leading market players, legal experts, technology experts, retired Judges of this Court or the High Courts, academicians, representatives of industry associations and investor associations. During the consultative process, SEBI also invites and duly considers comments from the public on their proposed regulations. SEBI follows similar consultative processes while reviewing and amending its regulations.
(Extracted, with edits and revision, from the judgement in Vishal Tiwari v. Union of India, [2024] 1 S.C.R. 171)
Question: 1
Which of the following is not a committee setup by SEBI?
Which of the following is not a committee setup by SEBI?
Updated On: Sep 10, 2025
- Technical Advisory Committee
- Competition Advisory Committee
- Intermediary Advisory Committee
- Market Data Advisory Committee
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The Correct Option is B
Solution and Explanation
SEBI, or the Securities and Exchange Board of India, is responsible for regulating the securities market in India. It was established to protect investors and promote the development of the securities market. To fulfill these objectives, SEBI has set up various advisory committees. Each committee assists SEBI in formulating and amending regulations by providing expert advice and insight. The key committees established by SEBI include:
- Technical Advisory Committee
- Intermediary Advisory Committee
- Market Data Advisory Committee
These committees ensure that SEBI remains informed of the latest trends and challenges in the securities market, enabling it to make informed decisions and enforce regulations effectively.
Among the options provided:
- Technical Advisory Committee
- Competition Advisory Committee
- Intermediary Advisory Committee
- Market Data Advisory Committee
the Competition Advisory Committee is not one of the committees established by SEBI. The focus of SEBI is on securities regulation, and while competition may be an area of interest for related bodies, it is not directly under the purview of SEBI's advisory committees.
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Question: 2
Which among the following is not a function of SEBI?
Which among the following is not a function of SEBI?
Updated On: Sep 10, 2025
- regulating substantial acquisition of shares and takeover of companies
- prohibiting and regulating self-regulatory organisations
- prohibiting insider trading in securities
- promoting investors education and training of intermediaries of securities markets
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The Correct Option is B
Solution and Explanation
SEBI, or the Securities and Exchange Board of India, is the regulatory authority established to oversee the securities market in India. It has specific functions as laid down in the SEBI Act 1992. The functions of SEBI include:
- Regulating substantial acquisition of shares and takeover of companies to ensure fair and transparent market practices.
- Prohibiting insider trading in securities, thereby maintaining integrity and fairness in the market.
- Promoting investors' education and training of intermediaries of securities markets to enhance understanding and expertise in the market.
However, the function of "prohibiting and regulating self-regulatory organisations" is not a function of SEBI as defined under its mandate. SEBI's role primarily revolves around protecting investor interests, regulating and developing the securities market, and it does not prohibit or regulate self-regulatory organizations directly.
| Option | Description |
|---|---|
| Regulating substantial acquisition of shares and takeover of companies | Function of SEBI |
| Prohibiting and regulating self-regulatory organisations | Not a function of SEBI |
| Prohibiting insider trading in securities | Function of SEBI |
| Promoting investors education and training of intermediaries of securities markets | Function of SEBI |
Thus, the correct answer is: prohibiting and regulating self-regulatory organisations
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Question: 3
Match List I with List II:List I
(Section of Securities and Exchange Board of India Act, 1992)
List II
(Provision for)
A Section 6 I Offences by companies B Section 11 II Power to make regulations C Section 27 III Removal of member from office D Section 30 IV Functions of Board
Choose the correct answer:
Match List I with List II:
Choose the correct answer:
List I (Section of Securities and Exchange Board of India Act, 1992) | List II (Provision for) | ||
|---|---|---|---|
| A | Section 6 | I | Offences by companies |
| B | Section 11 | II | Power to make regulations |
| C | Section 27 | III | Removal of member from office |
| D | Section 30 | IV | Functions of Board |
Updated On: Sep 10, 2025
- A-I, B-III, C-II, D-IV
- A-II, B-I, C-IV, D-III
- A-III, B-IV, C-I, D-II
- A-IV, B-II, C-III, D-I
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The Correct Option is C
Solution and Explanation
To solve this problem, we need to correctly match sections of the SEBI Act, 1992 (List I) with their corresponding provisions (List II). Let's analyze the sections:
- Section 6: This section deals with "Removal of member from office."
- Section 11: This section outlines "Functions of Board," focusing on protecting investor interests and regulating the securities market.
- Section 27: This section pertains to "Offences by companies."
- Section 30: This section grants SEBI the "Power to make regulations."
Based on the above information, the correct match is as follows:
- A-III (Section 6 - Removal of member from office)
- B-IV (Section 11 - Functions of Board)
- C-I (Section 27 - Offences by companies)
- D-II (Section 30 - Power to make regulations)
Thus, the correct answer is A-III, B-IV, C-I, D-II.
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Question: 4
The process by which an organisation thinks about and evolves its relationships with stakeholders for the common good, and demonstrates its commitment in this regard by adoption of appropriate business processes and strategies is called
The process by which an organisation thinks about and evolves its relationships with stakeholders for the common good, and demonstrates its commitment in this regard by adoption of appropriate business processes and strategies is called
Updated On: Sep 10, 2025
- Annual general meeting
- Corporate social responsibility
- Issuing Shelf prospectus
- Incorporation of a company
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The Correct Option is B
Solution and Explanation
The process mentioned in the question is known as Corporate Social Responsibility (CSR). CSR refers to a business model where organizations integrate social and environmental concerns in their operations and interactions with stakeholders. This includes engaging with stakeholders for the common good and adopting strategies and processes that reflect their commitment to sustainable development and ethical conduct.
Let's analyze the options:
- Annual General Meeting: This is a meeting of shareholders, typically held yearly, to discuss company performance and make key decisions, but it doesn't involve the proactive engagement and evolution of relationships for the common good as CSR does.
- Corporate Social Responsibility: Correct option, as it directly aligns with evolving relationships with stakeholders and adopting appropriate business strategies for the common good.
- Issuing Shelf Prospectus: Refers to a process used by companies to issue securities, which is unrelated to stakeholder relationship management and commitment to the common good.
- Incorporation of a company: This marks the legal process of forming a company, not specifically about evolving stakeholder relationships for the common good.
Thus, the answer is Corporate Social Responsibility.
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Question: 5
In which of the following cases did the court struck down the attempt of the government to nationalise banks and pay minimal compensation to the shareholders?
In which of the following cases did the court struck down the attempt of the government to nationalise banks and pay minimal compensation to the shareholders?
Updated On: Sep 10, 2025
- Shri Sunil Siddharthbhai Etc v. Union of India
- R.C. Cooper v. Union of India
- United Bank of India v. Satyawati Tondon & Ors
- Punjab National Bank v. Union of India
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The Correct Option is B
Solution and Explanation
In the landmark case of R.C. Cooper v. Union of India, the court struck down the government’s attempt to nationalize banks with inadequate compensation to the shareholders. This case is significant in the legal domain as it emphasized the importance of fair compensation and the protection of property rights under the Constitution of India.
During the case, the Supreme Court of India scrutinized the government’s actions under Article 31, which deals with the right to property. The decision reflected on the balance of powers between the state’s authority to undertake economic reforms and the rights of individuals, ensuring that compensation for property acquisition was just and adequate.
This ruling not only set a precedent for future nationalization efforts but also reinforced the judiciary’s role in safeguarding constitutional rights against potential misuse of power by the state. As a result, the case became a cornerstone in Indian jurisprudence regarding property rights and compensation.
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\[\begin{array}{|c|c|} \hline \textbf{List-1} & \textbf{List-II} \\ \hline \text{(A) Ram Jawaya Kapur v. State of Punjab} & \text{(I) Separation of powers} \\ \hline \text{(B) Delhi Laws Act, 1912} & \text{(II) Delegated legislation} \\ \hline \text{(C) Maneka Gandhi v. Union of India} & \text{(III) Doctrine of proportionality} \\ \hline \text{(D) Om Kumar v. Union of India} & \text{(IV) Post decisional hearing} \\ \hline \end{array}\]
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The impugned constitutional amendments by which Article 16 (4-A) and 16 (4-B) have been inserted, flow from Article 16 (4). They do not alter the structure of Article 16 (4). They retain the controlling factors or the compelling reasons which enables the State to provide for reservation keeping in mind the overall efficiency of the state administration under article 335. Sub-categorization within a class is a constitutional requirement to secure substantive equality in the event that there is a distinction between two sections of a class; Sub-classification must not lead to the exclusion of one of the categories in the class. A model that provides sufficient opportunities to all categories of the class must be adopted; and Sub-classification among a class must be on a reasonable basis.
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