SEBI Safeguarding the Interests of the Investors for APSC – APSC Mains Solved Question Papers

Discuss how Securities and Exchange Board of India safeguards the interests of the investors | APSC Mains Exam 2022

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APSC Mains Solved Question Papers 2022

Well here is the APSC Mains Solved Question Paper of 2022. Check this APSC previous year solved question SEBI Safeguarding the Interests of the Investors to prepare for future APSC Mains Exam. 

• Discuss how Securities and Exchange Board of India safeguards the interests of the investors ?

The Securities and Exchange Board of India Act, 1992 (the SEBI Act) was amended in the years 1995, 1999 and 2002 to meet the requirements of changing needs of the securities market and Responding to the development in the securities market. 

The Primary function of Securities and Exchange Board of India under the SEBI Act, 1992 is the protection of the investors’ interest and the healthy development of Indian financial markets.

To protect the interests of investors through proper education and guidance as regards their investment in securities. For this, SEBI has made rules and regulation to be followed by the financial intermediaries such as brokers, etc. 

SEBI looks after the complaints received from investors for fair settlement. It also issues booklets for the guidance and protection of small investors. To regulate and control the business on stock exchanges and other security markets. For this, SEBI keeps supervision on brokers. Registration of brokers and sub- brokers is made compulsory and they are expected to follow certain rules and regulations.

SEBI has issued guidelines to companies (bringing new issues in the market), mutual funds, portfolio managers, merchant bankers, underwriters, lead managers, merchant bankers, underwriters and lead managers etc. to comply with the provisions relating to protection investors and for the development of healthy trading practices in the securities markets. These guidelines are for bringing transparency in their operations and also for avoiding exploitation of investors by one way or the other. 

SEBI has introduced a code of advertisement for public issues for ensuring full, fair and truthful disclosures and to aware the public about the risks involved in investments. The investors can make online complaints to SEBI if they face any problem related to non-receipt of shares certificates, non transfer of shares, non- receipts of dividend and other fraudulent practices of the companies. SEBI acts for redressal of grievances of investors, undertakes investigations and take actions against the defaulting companies.

SEBI Safeguarding the Interests of the Investors

One of the key objectives of SEBI is to safeguard the interests of investors. SEBI employs various measures and regulations to ensure investor protection and promote fair and transparent dealings in the securities market. 

Here are some ways in which SEBI safeguards the interests of investors:

1. Regulatory Framework : 

SEBI establishes and enforces a robust regulatory framework that governs the functioning of various entities in the securities market, including stock exchanges, brokers, depositories, mutual funds, and credit rating agencies. It formulates regulations, guidelines, and codes of conduct to ensure investor protection and prevent fraudulent practices.

2. Disclosure Requirements : 

SEBI mandates companies and market intermediaries to provide accurate, adequate, and timely disclosure of information to investors. This includes financial statements, annual reports, prospectuses, and other disclosures that enable investors to make informed investment decisions. SEBI ensures that the companies and intermediaries adhere to these disclosure requirements.

3. Investor Education and Awareness : 

SEBI places a strong emphasis on investor education and awareness programs. It conducts investor education initiatives, disseminates information on investment products and risks, and promotes financial literacy among investors. SEBI aims to empower investors with knowledge and enable them to make informed investment decisions.

4. Investor Grievance Redressal : 

SEBI has established a robust mechanism for the redressal of investor grievances. It maintains an online complaint registration system where investors can lodge their grievances against listed companies, intermediaries, or other market participants. SEBI takes necessary actions to address the grievances and resolves disputes through arbitration and adjudication processes.

5. Market Surveillance : 

SEBI conducts market surveillance to detect any manipulative or fraudulent activities that may harm investor interests. It monitors trading patterns, investigates irregularities, and takes appropriate enforcement actions against market participants involved in insider trading, price manipulation, or other unlawful activities.

6. Code of Conduct and Insider Trading Regulations : 

SEBI has laid down a comprehensive code of conduct for market intermediaries and insider trading regulations to prevent the misuse of privileged information. These regulations ensure that market participants act ethically, maintain confidentiality, and refrain from engaging in unfair practices that could disadvantage investors.

7. Collective Investment Schemes (CIS) Regulation : 

SEBI regulates collective investment schemes such as mutual funds to protect the interests of investors. It sets eligibility criteria for asset management companies, establishes guidelines for the functioning of mutual funds, and monitors their compliance with investment norms. SEBI also ensures that investors’ funds are managed prudently and in their best interests.

Overall, SEBI plays a crucial role in safeguarding the interests of investors in India. Through its regulatory framework, disclosure requirements, investor education initiatives, grievance redressal mechanism, market surveillance, and various other measures, SEBI aims to foster investor confidence, transparency, and fair practices in the securities market.

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