Securities and Exchange Board of India

The securities and exchange board of India is a regulatory body that has its headquarters in Mumbai, Maharashtra. It has more than 867 employees. Madhabi Puri Buch is the current chairman of SEBI. The Ministry of Finance and the Government of India is the parent department of SEBI. Forward Markets Commission, Association of Mutual Funds of India, National Securities Depository Limited and Central Securities Depository Limited are the departments that come under SEBI.

SEBI protects the interests of its investors and regulates the securities market. 

It is run by a board of members. The board members include a chairman, who is nominated by the union government. There are two members from the finance ministry and one member is from the Reserve Bank of India. Five members are nominated by the centre. 

SEBI has its regional offices in Ahmedabad, Kolkata, Chennai and Delhi. 

MCQs 

Q1 In which year was SEBI established? 

1. 1. 1987 
   2. 1992
   3. 1962
   4. 1953

Answer- B) 1992

The securities and exchange board of India was established in 1992 as a statutory body. The Provisions of the securities and exchange board of India act came into force on January 30, 1992. 

Q2 Where are the headquarters of SEBI located? 

1. 1. Mumbai 
   2. Delhi 
   3. Pune 
   4. Chennai 

Answer- A) Mumbai 

SEBI has its headquarters in Bandra Kurla Complex, Mumbai. It is in the business district of Mumbai. The regional offices of SEBI are located in Delhi, Kolkata, Chennai and Ahmedabad. 

Q3 Who nominates the Chairman of SEBI? 

1. 1. Parliament of India 
   2. President of India 
   3. Finance Minister of India 
   4. Union Government of India 

Answer- D) Union Government of India

The central government has the power to nominate almost all the members of SEBI. Apart from the chairman, there are two members. They are chosen from corporate and finance ministers and five other members, amongst whom, three of the members should be full-time members. 

Q4 Who is the current chairman of SEBI? 

1. 1. Madhabi Puri Buch 
   2. Ajay Tyagi 
   3. S.K. Mohanty
   4. Ananta Barua 

Answer- A) Madhabi Puri Buch 

Madhabi Puri Buch is the first female chairman of SEBI. She’s in charge of overlooking India’s 3.3 trillion dollar stock market exchange. 

Q5 Which of the following holds for SEBI? 

1. 1. It undertakes the registration of brokers and sub-brokers 
   2. Make changes in the books of accounts of people 
   3. Analyze the financial statements 
   4. Control over buying and selling of stocks 

Answer- A) It undertakes registration of brokers and sub-brokers 

A sub-broker is also required to seek registration with SEBI according to SEBI Act, 1992. 

Q6 Which of the following committees is a SEBI committee? 

1. 1. Financial standing committee 
   2. Public accounts committee 
   3. Mutual Fund Advisory committee
   4. Estimates committee

Answer- C) Mutual Fund Advisory committee

SEBI looks after the policies and regulates the mutual funds to ensure safe transactions for investors. 

Q7 What are the two kinds of brokers? 

1. 1. Financial and margin brokers 
   2. Trading and order brokers 
   3. Present and asset brokers 
   4. Discount and merchant brokers

Answer- D) Discount and merchant brokers 

A discount broker buys and sells stocks at a low commission rate than the market rate. 

Q8 What is the current rolling cycle under SEBI? 

1. 1. T+5 
   2. T+1 
   3. T+2
   4. T+3 

Answer- B) T+1 

SEBI introduced the T+ 1 rolling cycle at end of 2021. All trades made by BSE and NSE are made on a T+1 cycle. All the trades are settled within one day of them taking place. 

Q9 When was the Depositories Act passed? 

1. 1. 1996 
   2. 1994 
   3. 1992
   4. 1997 

Answer- A) 1996 

Q10 What is the current application limit for retail investors? 

1. 1. Rs 200000
   2. Rs 500000
   3. Rs 100000 
   4. Rs 400000 

Answer- B) Rs 500000 

Retail IPO applicators have to pay via UPI up to Rs 500000. This limit was increased from Rs 20000 by SEBI. 

Q11 Who was the regulatory authority before SEBI came into existence? 

1. 1. Controller of Capital Issues 
   2. Reserve Bank of India
   3. National Bank for agricultural and rural development 
   4. Pension Fund Regulatory and development authority

Answer- A) Controller of Capital Issues

The controller of Capital Issues derived authority from the capital issues Act, 1947. 

They were in authority until 1988 when SEBI first came into power as a non-statutory body. 

Q12 What is the number of departments under SEBI? 

1. 1. 10 
   2. 15 
   3. 20 
   4. 12 

Answer- C) 20 

SEBI governs the Indian financial market with the help of 20 departments and regional offices. 

Q13 Which of the departments does not fall under SEBI? 

1. 1. Corporation finance 
   2. Economic and policy analysis
   3. Debt and hybrid securities 
   4. Ministry of commerce and industry 

Answer- D) Ministry of commerce and industry

Q14 SEBI does not provide a platform for _________? 

1. 1. Stockbrokers 
   2. Hedge fund investors 
   3. Portfolio managers 
   4. Investment advisors 

Answer- B) Hedge fund investors

Q15 What kinds of operations are regulated under SEBI? 

1. 1. Depositories 
   2. Participants
   3. Custodians of securities 
   4. All of the above 

Answer- D) All of the above 

Q16 What is prohibited under SEBI? 

1. 1. Insider trading 
   2. Open bidding 
   3. Price competition 
   4. Consumer protection 

Answer- A) Insider trading 

SEBI ensures fair trade practices. It regulates discipline in trading practices. 

Q17 What is not true for the authority of SEBI? 

1. 1. Quasi-judicial 
   2. Quasi-executive 
   3. Quasi-legislative 
   4. Quasi-authoritative

Answer- D) Quasi-authoritative

Q18 Mutual Funds are managed by __________ 

1. 1. Asset management companies 
   2. Limited liability company 
   3. Private company limited by shares 
   4. Unlimited company 

Answer- A) Asset management companies 

Asset management companies collect funds from individual and company investors to invest in securities. These companies invest funds in stocks, bonds and real estate. 

Q19 What is the required net worth of asset management companies? 

1. 1. Rs 50,000,000 
   2. Rs 60,000,000 
   3. Rs 10,000,000 
   4. Rs 20,000,000 

Answer- A) Rs 50,000,000 

Q20 What is AMFI? 

1. 1. Association of money and finance India 
   2. Association of mutual funds in India
   3. Authorisation of mutual funds in India 
   4. Authorisation of money and finance in India 

Answer- B) Association of Mutual Funds in India

It is the regulatory authority for dealing with mutual funds in India. It came into existence in 1995. 

Q21 What is the number of current asset management companies as of April 2022? 

1. 1. 43 
   2. 42 
   3. 44 
   4. 45 

Answer- B) 42 

There are a total of 42 operational mutual fund houses in India as of April 2022. 

Q22 Which of the following is not an asset management company? 

1. 1. Aditya Birla Sun Life AMC limited 
   2. Quant money managers limited 
   3. Edelweiss asset management limited 
   4. Tata consultancy services 

Answer- D) Tata consultancy services

Q23 How many members govern SEBI from RBI? 

1. 1. 1 
   2. 2 
   3. 3
   4. 4 

Answer- A) 1 

One member from the Reserve Bank of India is a part of the governing body of SEBI. 

Q24 What are the new norms for security exchanges to exist under SEBI? 

1. 1. The net worth of Rs 2 Billion and annual trading of Rs 10 Billion 
   2. The net worth of Rs 1 Billion and annual trading of Rs 10 Billion 
   3. The net worth of Rs 10 Billion and annual trading of Rs 1 Billion 
   4. The net worth of Rs 10 Billion and annual trading of Rs 2 Billion 

Answer- A) Net worth of Rs 2 Billion and an annual trading of Rs 10 Billion

Q25 What is the maximum period for which the SEBI chairman is appointed? 

1. 1. 2 years 
   2. 3 years 
   3. 4 years 
   4. 5 years 

Answer- D) 5 years 

The SEBI chairman can be appointed for a maximum of 5 years or till the age of 65 years, whichever comes earlier. 

Q26 _________ was the first chairman of SEBI 

1. 1. G.V. Ramakrishna 
   2. Ajay Tyagi
   3. U K Sinha 
   4. C. B. Bhave 

Answer- A) G.V. Ramakrishna 

G.V. Ramakrishna was the first chairman of SEBI. He passed away in March 2021. 

Q27 What is the current status of the regulations of SEBI? 

1. 1. Regulatory 
   2. Non-statutory 
   3. Statutory 
   4. Independent 

Answer- C) Statutory 

SEBI gained statutory power and status in 1992. 

Q28 What is the main function of SEBI? 

1. 1. Regulate the Indian capital market 
   2. Grant loans 
   3. Provide Credit facilities
   4. Discounting of bills 

Answer- A) Regulate the Indian capital market

SEBI protects the interests of investors. 

Q29 How many board members form a part of SEBI? 

1. 1. 2 
   2. 7 
   3. 9 
   4. 3 

Answer- C) 9 

Q30 How many regional offices does SEBI have? 

1. 1. Three 
   2. Four 
   3. Two 
   4. One 

Answer- B) Four 

Q31 The securities and Exchange Board of India overlooks the need of _________________ 

1. 1. Investors 
   2. Market intermediaries 
   3. Issuer of securities 
   4. All of the above 

Answer- D) All of the above. 

Q32 SEBI drafts regulations in its ___________ authority

1. 1. Quasi-legislative 
   2. Quasi-judicial 
   3. Quasi-executive 
   4. Quasi-authoritative

Answer- A) quasi-legislative

Q33 What is SAT under SEBI? 

1. 1. Scholastic assessment test 
   2. Standard assessment test
   3. Securities Appellate Tribunal 
   4. Securities Appellate Test 

Answer- C) Securities Appellate Tribunal

Q34 How many members are a part of the Securities Appellate Tribunal under SEBI? 

1. 1. Three 
   2. Four 
   3. Five 
   4. Two 

Answer- A) Three 

The Securities Appellate Tribunal is a three-member tribunal. 

Q35 Who is the current head of the Securities Appellate Tribunal under SEBI? 

1. 1. Altamas Kabir 
   2. Dipak Misra 
   3. Ranjan Gogoi 
   4. Tarun Agarwala 

Answer- D) Tarun Agarwala