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: Dec 3, 2024
- 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 has established various advisory committees to help in formulating regulations and policies. However, the ”Competition Advisory Committee” is not one of them. SEBI focuses on committees like the Technical Advisory Committee, Intermediary Advisory Committee, and Market Data Advisory Committee to regulate the market and its participants.
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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: Dec 3, 2024
- 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
While SEBI is responsible for regulating various aspects of the securities market, including acquisitions, insider trading, and investor education, it does not regulate self-regulatory organizations. The function mentioned in option (B) is generally handled by the self-regulatory organizations themselves, under SEBI’s oversight.
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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: Dec 3, 2024
- 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
Section 6 deals with the removal of a member from office, which corresponds to III.
Section 11 outlines the functions of the SEBI Board, which corresponds to IV.
Section 27 refers to offences by companies, which corresponds to I.
Section 30 grants the SEBI Board the power to make regulations, which corresponds to II.
Thus, the correct matching 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: Dec 3, 2024
- 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 described in the question is called Corporate Social Responsibility (CSR), which involves a company’s efforts to assess and take responsibility for its effects on environmental and social well-being. This process helps businesses adopt strategies that promote social good.
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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: Dec 3, 2024
- 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 case of R.C. Cooper v. Union of India, the Supreme Court of India struck down the attempt by the government to nationalize banks and pay minimal compensation to the shareholders, ruling that such an action was unconstitutional.
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