Securities and Exchange Board of India

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The Securities and Exchange Board of India (SEBI) is the regulator of the Indian securities market. It was established in 1992 by the Government of India to protect the interests of investors in securities and to promote the development of, and regulate, the securities market in India.

SEBI’s sub topics include:

  • Company Law
  • Depositories
  • DerivativesDerivatives
  • Foreign Institutional Investors
  • Mutual Funds
  • Primary Market
  • Public Issue
  • Registrars to an Issue and Share Transfer Agents
  • Securities
  • Stock Exchanges
  • Takeovers
  • Unlisted Securities Market
  • Investor Education and Protection Fund
    The Securities and Exchange Board of India (SEBI) is the regulator of the Indian securities market. It was established in 1992 by the Government of India to protect the interests of investors in securities and to promote the development of, and regulate, the securities market in India.

SEBI’s sub topics include:

  • Company Law
  • Depositories
  • Derivatives
  • Foreign Institutional Investors
  • Mutual Funds
  • Primary Market
  • Public Issue
  • Registrars to an Issue and Share Transfer Agents
  • Securities
  • Stock Exchanges
  • Takeovers
  • Unlisted Securities Market
  • Investor Education and Protection Fund

Company Law

SEBI is responsible for regulating the activities of companies listed on Indian stock exchanges. This includes ensuring that companies comply with all applicable laws and regulations, such as the Companies Act, 2013. SEBI also regulates the issue of new SharesShares by companies and the disclosure of information to investors.

Depositories

Depositories are central institutions that hold securities in electronic form. This allows investors to hold their shares in a safe and secure place, and to transfer them easily between different accounts. SEBI regulates the activities of depositories in India.

Derivatives

Derivatives are financial instruments that derive their value from the price of another asset, such as a stock or a commodity. SEBI regulates the trading of derivatives in India.

Foreign Institutional Investors

Foreign Institutional Investors (FIIs) are investors from outside India who invest in Indian securities. SEBI regulates the activities of FIIs in India.

Mutual Funds

Mutual funds are a type of InvestmentInvestment fund that pools MoneyMoney from many investors and invests it in a variety of assets, such as stocks, BondsBonds, and other securities. SEBI regulates the mutual fund IndustryIndustry in India.

Primary Market

The primary market is the market for new issues of securities. SEBI regulates the issue of new shares by companies in the primary market.

Public Issue

A public issue is an offer of securities to the public. SEBI regulates public issues in India.

Registrars to an Issue and Share Transfer Agents

Registrars to an Issue and Share Transfer Agents (RTAs) are companies that are appointed by companies to manage the issue of new shares and the transfer of shares between investors. SEBI regulates the activities of RTAs in India.

Securities

Securities are financial instruments that represent a claim on the issuer. Examples of securities include shares, bonds, and DebenturesDebentures. SEBI regulates the trading of securities in India.

Stock Exchanges

Stock exchanges are marketplaces where securities are traded. SEBI regulates the activities of stock exchanges in India.

Takeovers

A takeover is a situation where one company acquires control of another company. SEBI regulates takeovers in India.

Unlisted Securities Market

The unlisted securities market is the market for securities that are not listed on a stock exchange. SEBI regulates the unlisted securities market in India.

Investor Education and Protection Fund

The Investor Education and Protection Fund (IEPF) is a fund that is used to compensate investors who have suffered losses due to fraud or other illegal activities in the securities market. SEBI administers the IEPF.

SEBI is a powerful regulator that has a significant impact on the Indian securities market. It is responsible for protecting the interests of investors and for promoting the development of the securities market. SEBI’s regulations are designed to ensure that the securities market is fair, transparent, and efficient.
Company Law

  • What is company law?
    Company law is the body of law that governs the formation, operation, and DissolutionDissolution of companies.

  • What are the different types of companies?
    There are two main types of companies: private companies and public companies. Private companies are companies that are not listed on a stock exchange, while public companies are companies that are listed on a stock exchange.

  • What are the requirements for forming a company?
    The requirements for forming a company vary from country to country. In India, the requirements for forming a company are as follows:

    • The company must have at least two shareholders.
    • The company must have at least one director.
    • The company must have a registered office in India.
    • The company must file a memorandum of association and articles of association with the Registrar of Companies.

  • What are the benefits of forming a company?
    The benefits of forming a company include:

    • Limited liability: The shareholders of a company are only liable for the debts of the company up to the amount of their investment in the company.
    • Continuity of existence: A company is a legal entity that is separate from its shareholders. This means that the company can continue to exist even if its shareholders change.
    • Ease of transfer of shares: Shares in a company can be easily transferred, which makes it easier for companies to raise capital.

Depositories

  • What is a depository?
    A depository is an institution that holds securities in electronic form on behalf of investors.

  • What are the benefits of using a depository?
    The benefits of using a depository include:

    • Convenience: Investors can hold their securities in electronic form and do not need to worry about physical certificates.
    • Safety: Securities held in a depository are safe from theft and loss.
    • Efficiency: Transactions involving securities held in a depository are processed more efficiently than transactions involving physical certificates.

Derivatives

  • What is a derivative?
    A derivative is a financial instrument whose value is derived from the value of another asset.

  • What are the different types of derivatives?
    The different types of derivatives include:

    • Futures contracts: A futures contract is an agreement to buy or sell an asset at a specified price on a specified date in the future.
    • OptionsOptions contracts: An options contract is an agreement that gives the buyer the right, but not the obligation, to buy or sell an asset at a specified price on or before a specified date.
    • Swaps: A swap is an agreement to exchange one stream of cash flows for another stream of cash flows.

  • What are the risks of trading derivatives?
    The risks of trading derivatives include:

    • Market risk: The value of a derivative can fluctuate significantly due to changes in the market.
    • Counterparty risk: The risk that the other party to a derivative contract will not fulfill its obligations.
    • Operational risk: The risk of losses due to errors, fraud, or other problems with the execution of a derivative trade.

Foreign Institutional Investors

  • What is a foreign institutional investor (FII)?
    A foreign institutional investor is an investor that is not a resident of India.

  • What are the requirements for FII investment in India?
    The requirements for FII investment in India are as follows:

    • FIIs must register with the Securities and Exchange Board of India (SEBI).
    • FIIs must invest through a registered portfolio manager.
    • FIIs are subject to certain investment limits.

  • What are the benefits of FII investment in India?
    The benefits of FII investment in India include:

    • Increased liquidity in the Indian stock market.
    • Increased foreign investment in India.
    • Increased competition in the Indian stock market.

Mutual Funds

  • What is a mutual fund?
    A mutual fund is a professionally managed investment fund that pools money from many investors to purchase securities.

  • What are the different types of mutual funds?
    The different types of mutual funds include:

    • EquityEquity funds: Equity funds invest in stocks.
    • Debt funds: Debt funds invest in bonds and other debt securities.
    • Hybrid funds: Hybrid funds invest in a mix of stocks and bonds.
    • Index funds: Index funds track a specific market index, such as the S&P 500.
    • Exchange-traded funds (ETFs): ETFs are similar to index funds, but they trade on an exchange like stocks.

  • What are the benefits of investing in mutual funds?
    The benefits of investing in mutual funds include:

    • Professional management: Mutual funds are managed by professional money managers who have expertise in investing.
    • Which of the following is not a sub topic of SEBI?
      (A) Company Law
      (B) Depositories
      (CC) Derivatives
      (D) Foreign Institutional Investors
      (E) Mutual Funds

  • SEBI was established in which year?
    (A) 1992
    (B) 1993
    (C) 1994
    (D) 1995
    (E) 1996

  • SEBI is responsible for which of the following?
    (A) Protecting the interests of investors in securities
    (B) Promoting the development of the securities market in India
    (C) Regulating the securities market in India
    (D) All of the above

  • Which of the following is not a function of SEBI?
    (A) Regulating stock exchanges
    (B) Regulating mutual funds
    (C) Regulating derivatives markets
    (D) Regulating foreign institutional investors
    (E) Regulating the primary market

  • Which of the following is not a type of security?
    (A) Equity shares
    (B) Debt securities
    (C) Derivatives
    (D) Mutual funds
    (E) All of the above are types of securities

  • Which of the following is not a type of stock exchange?
    (A) National Stock Exchange of India (NSE)
    (B) Bombay Stock Exchange (BSE)
    (C) Metropolitan Stock Exchange of India (MSEI)
    (D) National Stock Exchange of India (NSE) and Bombay Stock Exchange (BSE) are the only two stock exchanges in India
    (E) All of the above are types of stock exchanges in India

  • Which of the following is not a type of takeover?
    (A) Friendly takeover
    (B) Hostile takeover
    (C) Partial takeover
    (D) All of the above are types of takeovers

  • Which of the following is not a type of unlisted security?
    (A) Shares in a private company
    (B) Debentures in a private company
    (C) Units in a mutual fund
    (D) All of the above are types of unlisted securities

  • Which of the following is not a function of the Investor Education and Protection Fund (IEPF)?
    (A) Compensating investors who have lost money due to fraud or other illegal activities
    (B) Providing financial assistance to investors who have suffered losses due to natural disasters or other unforeseen events
    (C) Promoting investor education and awareness
    (D) All of the above are functions of the IEPF

  • Which of the following is not a type of fraud that can occur in the securities market?
    (A) Insider trading
    (B) Market manipulation
    (C) Pyramid schemes
    (D) All of the above are types of fraud that can occur in the securities market

Answers:
1. (D)
2. (A)
3. (D)
4. (E)
5. (D)
6. (D)
7. (D)
8. (C)
9. (B)
10. (D)