Students get through the TN Board 12th Commerce Important Questions Chapter 8 Securities Exchange Board of India (SEBI) which is useful for their exam preparation.
TN State Board 12th Commerce Important Questions Chapter 8 Securities Exchange Board of India (SEBI)
Very short answer questions
Question 1.
When was the SEBI established?
Answer:
- Securities and Exchange Board of India (SEBI) is an apex body that maintains and regulates our capital.
- It was established in 1988 by the Indian Government but got statutory powers in 1992.
- It plays a great role in the Indian economy.
Question 2.
How many key functions of SEBI.
Answer:
SEBI performs three key functions
- Quasi-legislative
- Quasi-judicial and
- Quasi-executive
Question 3.
What is the power to regulate the business on the stock market?
Answer:
- Efficient services may be provided to all the parties.
- It drafts regulations, conducts investigation and enforcement action and it passes rulings and orders.
- Registration of brokers and sub-brokers is made mandatory.
Question 4.
How to control over Brokers by SEBI?
Answer:
- To supervise and check the activities of the brokers and other middlemen in order to control the capital market.
- To regulate their activities, it was necessary to establish the SEBI.
Question 5.
How to open a Demat Account?
Answer:
- Fill up an account opening form and submit it along with copies of the required documents
- A Passport-Sized Photograph
- Proof of Identity
- Proof of Address
Also carry the original documents for verification.
Question 6.
What is meant by “PAN”?
Answer:
PAN or Permanent Account Number is a unique 10-digit alphanumeric identity allotted to each taxpayer by the Income Tax Department under the supervision of the Central Board of Direct Taxes. It also serves as identity proof.
Question 7.
In what way SEBI is to provide security to the Investors?
Answer:
Protecting them from the wrong information given by the companies in their prospectus, reducing the risk of delivery and payment, etc.
- Safeguarding the interests of investors by means of adequate education and guidance.
- SEBI makes rules and regulations that must be followed by the financial Intermediaries.
Question 8.
How to impose Monetary Penalties on Capital Market by SEBI?
Answer:
- To impose monetary penalties on capital market intermediaries and other participants for a range of violations.
- It can even impose a suspension of their registration for a short period.
Short answer questions
Question 1.
What is the role played by SEBI in the Indian economy?
Answer:
SEBI is an apex body that maintains and regulates our capital market.
It was established in 1988 by the Indian Government but got statutory powers in 1992.
SEBI plays a great role in the Indian economy.
- Monitor’s the working of mutual funds
- Restricts illegal practices of firms
- Plays a great role in protecting investors interest
- Regulates the working of stock exchanges
- Conducts audit inspection
- Prohibits insider activity
Question 2.
Explain the guidelines issued by SEBI.
Answer:
- SEBI issues guidelines and instructions to businesses concerning capital issues.
- Separate guidelines are provided for initial public issues made by listed companies.
- It conducts research and publishes information beneficial to all market players (buyers and sellers).
- It has created regulations and guidelines that should be followed by mutual funds.
Long answer questions
Question 1.
Write briefly about Dematerialization (DEMAT).
Answer:
- Dematerialization is the process by which physical share certificates of an investor are taken back by the company/registrar and destroyed.
- Then an equivalent number of securities in the electronic form are credited to the investor’s account with his Depository Participant.
- Dematerialization is done at the request of the investor. Investors will first have to open an account with a DP (Depository Participant) and then request for dematerialization of certificates through the DP.
- Purchases made by an investor are credited to his account and sales are debited. The securities held in the dematerialized form are fungible.
- Dematerialized shares do not have any distinctive numbers. All the holdings of a particular society will be identical and interchangeable.
- Trading in dematerialized shares commenced on the NSE in December 1996.
- Reliance Industries was the first company to trade its 100 shares in Demat form.
- In the case of the BSE, dematerialization of shares commenced in the year December 1997.
Multiple-choice questions
1. In which year SEBI Act being passed by the Indian Parliament?
(a) 1990
(b) 1989
(c) 1985
(d) 1992
Answer:
(d) 1992
2. The foremost objective of the SEBI is to provide to the Investors.
(a) Security
(b) Regulate
(c) Control
(d) None
Answer:
(a) Security
3. To establish the SEBI was necessary to the activities of the brokers.
(a) Control
(b) Regulate
(c) Interest
(d) Trading
Answer:
(b) Regulate
4. Find out the function of SEBI.
(a) Protection of Investors
(b) Training
(c) Legal Powers
(d) All the above
Answer:
(d) All the above
5. SEBI has been empowered to impose monetary on capital market Intermediaries.
(a) Surcharge
(b) Penalties
(c) Incentive
(d) Bonus
Answer:
(b) Penalties
6. Dematerialization is done at the request of:
(a) The Investor
(b) Intermediaries
(c) The Producer
(d) None
Answer:
(a) The Investor
7. In which year the BSE dematerialization of shares?
(a) 1995
(b) 1993
(c) 1997
(d) 1999
Answer:
(c) 1997
8. Mention the documents require for a Demat Account:
(a) Address
(b) Proof of Identity
(c) Photo
(d) All the above
Answer:
(d) All the above
9. In which Board is an apex body that maintains and regulates our Capital Market?
(a) Stock Exchange
(b) SEBI
(c) Financial Market
(d) Security Market
Answer:
(b) SEBI
10. How many functions that SEBI performs?
(a) 5
(b) 3
(c) 6
(d) 4
Answer:
(b) 3
11. SEBI regulates the following: Way to protect the interest of investors
(a) Mergers
(b) Acquisition
(c) Both (a) and (b)
(d) None
Answer:
(c) Both (a) and (b)
12. Who is maintain effective supervision and avoids any unfair and anti-investor actions?
(a) Stock Market
(b) Financial Market
(c) Central Market
(d) SEBI
Answer:
(d) SEBI
13. Who is giving training to financial intermediaries?
(a) Central Government
(b) RBI
(c) State Government
(d) SEBI
Answer:
(d) SEBI
14. Who is issued a notification on delegating several powers under the Securities Contract Act to SEBI?
(a) Parliament
(b) Ministry of Finance
(c) The Government of India
(d) None
Answer:
(b) Ministry of Finance
15. Who is regulating and controlling the business on stock markets?
(a) SEBI
(b) RBI
(c) Parliament
(d) All the above
Answer:
(a) SEBI