Question:

Which of the following is not a protective function of Securities and Exchange Board of India?

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SEBI’s protective functions aim to ensure transparency and fairness in the securities market.- Development functions focus on market growth, investor education, and fostering innovation.- The role of SEBI is crucial for maintaining investor confidence and market stability.
  • Prohibition of fraudulent and unfair trade practices.
  • Controlling insider trading and imposing penalties for such practices.
  • Promotion of fair practices and code of conduct in securities market.
  • Undertaking measures to develop the capital markets by adapting a flexible approach.
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The Correct Option is D

Solution and Explanation

The question asks which of the given options is not a protective function of the Securities and Exchange Board of India (SEBI). Let's analyze each option:
  1. Prohibition of fraudulent and unfair trade practices: This is a protective function as SEBI ensures that the securities market is free from manipulative practices to protect investor interest.
  2. Controlling insider trading and imposing penalties for such practices: This also falls under protective functions, as controlling insider trading protects market integrity and investor trust.
  3. Promotion of fair practices and code of conduct in securities market: This is another protective measure to safeguard the interest of investors and ensure transparency.
  4. Undertaking measures to develop the capital markets by adapting a flexible approach: This option focuses on market development rather than protection, aligning with developmental functions, not protective ones.
Therefore, the correct answer is the fourth option: Undertaking measures to develop the capital markets by adapting a flexible approach. This option highlights a developmental role rather than a protective function.
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