Discuss the role... highlight the challenges... suggest reformsGS2UNKNOWN

Discuss the role of Securities and Exchange Board of India (SEBI) in the regulation of the share market and safeguarding the interests of investors. In the light of government highlight the challenges faced by the SEBI and suggest reforms in this regard. (Answer in 250 words) [15 Marks]

Introduction

Securities & Exchange Board of India (SEBI) is a statutory organisation which regulates EqQ share markets in India.

18 words

Main Body

Securities & Exchange Board of India (SEBI) is a statutory organisation which regulates EqQ share markets in India. Its functions are:

1Regulating companies, stock exchanges, clearing corporations, etc.

2Protecting investor interests via ensuring disclosures of information by companies.

3Investigating allegations/mal-practices. Eg:- SEBI panel for Adani short selling incident.

Challenges faced by SEBI:

1Volume: Ever growing share market, IPOs, etc. with start-up boom in India.

2Round-tripping: Money routed through shell companies making it difficult for SEBI to find ultimate beneficial owner. Eg:- Adani-ese.

3External Shocks:- SEBI cannot always protect own investor interest. Eg:- FPI outflow clue to Fed Rate rise in FY23 led to drop in stock markets.

4Cryptocurrencies: 1.5 million trade in crypto which is outside of SEBI purview.

5Corporate Governance Lapses:- Like Viking-fishers, PNB scam, etc. which threaten investor interest but cannot be controlled by SEBI alone.

Way Ahead:

1Reorganizing SEBI: Separate divisions for startups, blue-chip companies for efficiency.

2Inter-government group: Across RBI, SEBI, Ministry of Corporate Affairs, etc. to ensure borrowing, corporate governance as per regulations.

3International Coordination: Information sharing agreements between global exchange boards to avoid round-tripping.

4Enhanced investor outreach: via smartphones, monthly newsletter to educate them on new opportunities, market risks, etc.

SEBI has potential to mobilize savings of average Indian household & channelize it for India's growth story.

1Reorganizing SEBI: Separate divisions for startups, blue-chip companies for efficiency.

2Inter-government group: Across RBI, SEBI, Ministry of Corporate Affairs, etc. to ensure borrowing, corporate governance as per regulations.

3International Coordination: Information sharing agreements between global exchange boards to avoid round-tripping.

4Enhanced investor outreach: via smartphones, monthly newsletter to educate them on new opportunities, market risks, etc.

SEBI has potential to mobilize savings of average Indian household & channelize it for India's growth story.

302 words19 paragraphs

Conclusion

SEBI has potential to mobilize savings of average Indian household & channelize it for India's growth story.

17 words

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Page 29

Topper

Aniket Dnyaneshwar Hirde

Subject & Paper

GS2UNKNOWN

Topic

Governance and Regulation

Financial Market Regulation

SEBI role and functions

Writing Stats

337

Total words

Paragraphs

formal, informative

Tone