Which one of the following statements is correct ?

Question

Question

This question was previously asked in

UGC Paper 2: Commerce 22nd Dec 2018

SEBI has been constituted under the Securities (Contract and Regulation) Act, 1956.
SEBI is constituted from amongst the directors of various stock exchanges.
The purpose of issuing different types of rules and regulations by SEBI is to bring monetary gains to investors.
One of the objectives of setting up SEBI is to protect the interests of investors.

Answer 1

Securities and Exchange Board of India(SEBI)-

It is the regulator of the securities market in India.
Its objective is to protect the interest of investors in securities and regulate the securities market for matters connected therewith or incidental thereto.
It has wide authoritative and enforcing powers including the ability to impose fines and penalties on violators.
It was first established with limited powers in 1988 but was formally instituted in April 1992.
It supplanted the controller of Capital Issue, which had regulated the securities markets under the Capital Issues(Contract) Act of 1987.
It is headquartered at Bandra-Kurla Complex in Mumbai with regional offices at New Delhi, Kolkata, Chennai & Ahmedabad.
As per SEBI Charter, it is responsible for 3 major groups:
- Issuer of securities
- Investors
- Market intermediaries
It drafts regulations in its regulatory capacity, passes rulings in its judicial capacity, and conducts investigations on fraudulent malpractices with the imposition of penalties in its enforcing capacity.
It is run by a Board of Directors including a Chairman elected by the Parliament,2 officers from the Ministry of Finance,1 member from the Reserve Bank of India, and 5 members elected by the Parliament.

Therefore, one of the objectives of setting up SEBI is to protect the interests of investors.