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NISM Certifications · NISM-Series-VI: Depository Operations · Introduction to the Indian Capital Market

A company lists its shares through an IPO, and a client, Suresh Patel, asks about the regulator's role. Which statement about SEBI's role in the Indian capital market is correct?

SEBI regulates the securities market, protects investors and promotes orderly development of the market. Monetary policy, currency issue and forex reserves belong to the RBI, and SEBI does not fix IPO prices, which are decided by the issuer and merchant bankers through the pricing process.

  1. ASEBI regulates the securities market and is empowered to protect investors' interests and promote market developmentCorrect
  2. BSEBI sets the repo rate and controls bank credit
  3. CSEBI issues currency notes and manages foreign exchange reserves
  4. DSEBI directly decides the issue price of every IPO

Explanation

SEBI, under the SEBI Act, 1992, protects investors, regulates intermediaries and promotes market development. Repo rate and currency are RBI matters. Issue price is decided by the issuer and lead managers via fixed price or book building, not fixed by SEBI, which reviews disclosures.

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