CSEET · Economic and Business Environment · Key Government Institutions
A listed company's promoter is alleged to have traded on unpublished price-sensitive information. Which statement correctly reflects SEBI's position?
SEBI can investigate and take action against the promoter. Prohibiting insider trading is part of its regulatory mandate under the SEBI Act and its insider trading regulations, and it can act against individuals without a prior court direction or involvement of the Registrar of Companies.
- ASEBI can investigate and take action under its insider trading regulations, as prohibiting insider trading is within its mandateCorrect
- BSEBI has no role, because insider trading is handled only by the Registrar of Companies
- CSEBI can act only after the Supreme Court gives a direction
- DSEBI can act only against stock exchanges and not against individuals
Explanation
SEBI is empowered to prohibit insider trading and to investigate and penalise violators, including individuals such as promoters, under the SEBI Act and the PIT Regulations. It does not need prior court direction, and its jurisdiction covers persons dealing in securities, not only exchanges. The ROC does not regulate insider trading.
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