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NISM Certifications · NISM-Series-VII: Securities Operations and Risk Management · Introduction to the Securities Market

Which of the following best describes the role of SEBI in relation to the securities market?

SEBI is the securities market regulator whose purposes are protecting investors, promoting market development and regulating intermediaries. It is not a trade counterparty, a currency issuer or a depository; those roles belong to the clearing corporation, the RBI and depositories respectively.

  1. AIt acts as the regulator to protect investor interests, promote market development and regulate intermediariesCorrect
  2. BIt acts as the counterparty to every trade on exchanges
  3. CIt issues currency and regulates banks
  4. DIt acts as the depository for all listed securities

Explanation

SEBI is the statutory regulator of the securities market, established to protect investors, develop the market and regulate intermediaries. The clearing corporation acts as the counterparty, the RBI issues currency and regulates banks, and depositories like NSDL and CDSL hold securities in electronic form.

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