Samacheer Kalvi 12th Commerce Guide Chapter 8 Securities Exchange Board of India

Tamilnadu State Board New Syllabus Samacheer Kalvi 12th Commerce Guide Pdf 8 Securities Exchange Board of India Text Book Back Questions and Answers, Notes.

Tamilnadu Samacheer Kalvi 12th Commerce Solutions Chapter 8 Securities Exchange Board of India

12th Commerce Guide Securities Exchange Board of IndiaText Book Back Questions and Answers

I. Choose the correct answer.
Question 1.
Securities Exchange Board of India was first established in the year…………………
a) 1988
b) 1992
c) 1995
d) 1998
Answer:
a)1988

Samacheer Kalvi 12th Commerce Guide Chapter 8 Securities Exchange Board of India

Question 2.
The headquarters of SEBI is…………..
a) Calcutta
b) Bombay
c) Chennai
d) Delhi
Answer:
b) Bombay

Question 3.
In which year SEBI was constitued as the regulator of capital markets in India?
a) 1988
b) 1992
c) 2014
d) 2013
Answer:
a) 1988

Samacheer Kalvi 12th Commerce Guide Chapter 7 Stock Exchange

Question 4.
Registering and controlling the functioning of collective investment schemes as………….
a) Mutual Funds
b) Listing
c) Rematerialisation
d) Dematerialization
Answer:
d) Dematerialization

Question 5.
SEBI is empowered by the Finance ministry to nominate ………………….. members on the Governing body of every stock exchange.
a) 5
b) 3
c) 6
d) 7
Answer:
b) 3

Question 6.
The process of converting physical shares into electronic form is called ………………
a) Dematerialisation
b) Delisting
c) Materialisation
d) Debarring
Answer:
a) Dematerialisation

Samacheer Kalvi 12th Commerce Guide Chapter 7 Stock Exchange

Question 7.
Trading is dematerialized shares commenced on the NSE is ………………………
a) January 1996
b) June 1998
c) December 1996
d) December 1998
Answer:
c) December 1996
Question8.
…………..was the first company to trade its shares in Demat form.
a) Tata Industries
b) Reliance Industries
c) Infosys
d) Birla Industries
Answer:
b) Reliance Industries

Samacheer Kalvi 12th Commerce Guide Chapter 7 Stock Exchange

Question 9.
…………….. enables small investors to participate in the investment on share capital of large companies.
a) Mutual Funds
b) Shares
c) Debentures
d) Fixed deposits
Answer:
a) Mutual Funds

Question 10.
PAN stands for …………………
a) Permanent Amount Number
b) Primary Account Number
c) Permanent Account Number
d)Permanent Account Nominee
Answer:
c) Permanent Account Number

II. Very short answer questions.

Question 1.
Write a short notes on SEBI.
Answer:

  • Securities and Exchange Board of India [SEBl] is an APEX body that maintains and Regulates Capital Market.
  • It was established in 1988 as a supervisory Body for regulating the securities market.
  • It was made as an autonomous Body, on 12th may,1992 .
  • SEBI Act was passed in the Indian Parliament in the year 1992

Samacheer Kalvi 12th Commerce Guide Chapter 7 Stock Exchange

Question 2.
Write any two objectives of SEBI.
Answer:
Control Over Brokers:
The important object is supervise or check the activities of the Brokers, and other intermediaries in order to control the capital market.
Regulation of Stock Exchange :

  • The first objective of SEBI is to regulate the Stock Exchange.
  • So that efficient services may be provided to all the parties operating there.

Question 3.
What is Demat account?
Answer:

  • A Demat A/c holds all the shares that are purchased in Electronic form.
  • Like a Bank A/c, Demat A/c holds the certificate of financial instruments like Shares, Bonds, Government Securities. Mutual Funds and Exchange Trader Funds.
  • Purchases made by an investor is credited to his account and sail’s are debited to his account.

Samacheer Kalvi 12th Commerce Guide Chapter 7 Stock Exchange

Question 4.
Mention the headquarters of SEBI.
Answer:

Head Quarters – Mumbai [Bandra Kurla – Complex]
Samacheer Kalvi 12th Commerce Guide Chapter 8 Securities Exchange Board of India 1
Question 5.
What are the various ID proofs?
Answer:

  • PAN – card
  • Voter ID
  • Driving License
  • Bank Pass Book
  • Government – issued card with photo ID
  • Passport
  • Electricity Bill
  • Telephone Bill

Samacheer Kalvi 12th Commerce Guide Chapter 7 Stock Exchange

III. Short Answer Questions.

Question 1.
What is meant by Dematerialization?
Answer:

  •  Dematerialisation [DEMAT] is the process by physical share certificates of an investor are taken back by the Company or Register and destroyed.
  • Then an equivalent number of securities in the Electronic form are credited to the investors account with his Depository Participant. [DP]
  •  DEMAT is done at the request of the Investor.
  •  He has to open an account with a DP.
  •  In DEMAT A/c – Purchase – Credited his account.
  •  In DEMAT A/ c – Sales – Debited his account

Question 2.
What are the documents required for a Demat account?
Answer:

  •  You need to submit proof of Identity and Address along with a passport size photo and an account opening form.
  •  Only xerox copies of the documents are required for submission, but original copies are also required for verification.

Documents Proof of Identity and Address :

  •  PAN – card
  • Voter ID
  • Driving License
  • Bank Pass Book
  • Government-issued card with photo ID
  • Passport
  • Electricity Bill
  • Telephone Bill
  • All the documents with address issued by Both the Governments at its departments. [Legal – Education – PSU’s]

Samacheer Kalvi 12th Commerce Guide Chapter 7 Stock Exchange

Question 3.
What is the power of SEBI under Securities Contract Act?
Answer:

  •  Power to grant License to new stock exchange.
  •  Power to direct any stock exchange to amend the rules.
  •  Power to supersede governing body of any stock exchange.
  •  Power to ask information and accounts of the stock exchange.
  •  Power to suspend business of stock exchange.
  •  Power to prohibit contracts of stock exchange.

Question 4.
What is meant by Insiders trading?
Answer:

  • Insider Trading means the buying and selling of securities by Directors, Promoters etc. Who have access to some – Confidential information about the company and who wish to take advantage of this confidential information.
  • This affects the interests of the general investors.

Question 5.
Draw the organization structure of SEBI.
Answer:
Organisation Structure of SEBI

Samacheer Kalvi 12th Commerce Guide Chapter 8 Securities Exchange Board of India 2

 

IV. Long Answer Questions :

Question 1.
What are the functions of SEBI?
Answer:

functions :

  • SEBI is the NODAL agency which safeguards the interests of an investor in the Indian Financial Market.
    SEBI performs:

Samacheer Kalvi 12th Commerce Guide Chapter 8 Securities Exchange Board of India 3

  • Safeguarding the interest of the investors by means of adequate education and guidance.
  • SEBI makes Rules and Regulations that must be strictly followed by the participants of financial market.
  • Regulating and Controlling the business on Stock Exchange.
  • Registration of Brokers and sub-brokers is made mandatory.
  • Conduct inspection and inquiries of stock exchanges, intermediaries and self-regulating organisations.
  • Barring insider trading in securities.
  • Prohibiting deceptive and unfair methods by intermediaries.
  • Registering and Controlling share agents, banker, trustees, registrars, merchant bankers, under writers, managers etc.
  • SEBI regulates mergers and amalgamation as a way to protect the interest of the investors. Registering and Controlling the function of collective investment scheme such as mutual funds.
  • Promotting self-regulatory organisations intermediaries.
    Carrying out steps in order to develop the capital markets by having an accommodating approach.

Samacheer Kalvi 12th Commerce Guide Chapter 7 Stock Exchange

Question 2.
Explain the powers of SEBI.
Answer:
Powers of SEBI:
Stock Exchanges and Intermediaries :

  •  SEBI has wide powers regarding the Stock Exchange and – intermediaries dealing in securities.
  •  SEBI can inspect and ask information from the stock exchange and intermediaries.

Monetary Penalties:

SEBI has been empowered to impose monetary penalties on capital market intermediaries and other participants for a range of violations.

Actions in Functions Assigned:

  • SEBI has a power to initiate actions in regard to functions assigned.
  • Can issue guidelines and rules for the protection of the interest of the investors.

Regulate Business of Stock Exchange:

  •  SEBI is empowered to regulate the business of stock exchanges.
  •  It regulates the fraudulent and unfair trade practices.
    Insider Trading:
    SEBI has a power to regulate insider trading and functions of Merchant Bankers.

Question 3.
What are the benefits of Dematerialisation ? (advantages)
Answer:

  • The risks pertaining to physical certificates like loss, theft, forgery and damage are eliminated completely with a DEMAT A/c.
  • The lack of paper work enables quicker transactions and higher efficiency in trading.
  • Without the need of visiting the Broker, one can trade through computers at any location.
  • The shares that are created through mergers and consolidationof companies are credited automatically in the DEMAT A/c.
  • As all the transactIons occur through the DP, a trader does not have to communicate individually with. each and every company.
  • There is no need for stamp duty for transfer of securities.
  • Certain Banks are also permit holding of both equity and debentures in a single account.
  • Bank provide Trained and Dedicated CCD’s to assist in all the procedures.
  • A DEMAT account holder can buy or sell any amount of shares.
  • Holder can take loan against securities in DEMAT account.

Samacheer Kalvi 12th Commerce Guide Chapter 7 Stock Exchange

12th Commerce Guide Securities Exchange Board of India Additional Important Questions and Answers

I.Choose the correct answer.

Question 1.
In which year SEBI Act being passed by the Indian Parliament?
a) 1990
b) 1991
c) 1992
d) 1993
Answer:
c) 1992
Question 2.
…………….. is the foremost objective of SEBI.
a) Security
b) Regulate
c) Control
d) NOTA
Answer:
a) Security

Samacheer Kalvi 12th Commerce Guide Chapter 8 Securities Exchange Board of India

Question 3.
DEMAT is done at the request of ……..
a) Investors
b)Brokers
c) Speculators
d) NDTA
Answer:
a) Investors

Question 4.
Which is an Apex body that maintain and Regulates capital market?
a) Stock Exchange
b) SEBI
c) OTCEI
d) NSE
Answer:
b) SEBI

Samacheer Kalvi 12th Commerce Guide Chapter 8 Securities Exchange Board of India

Question 5.
Mention the documents required for a Demat A/c.
a) Address proof
b) ID proof
c) Photo
d) All of these
Answer:
d) All of these

Question 6.
SEBI has the following number of members including chairman.
a) 4
b) 5
c) 6
d) 7
Answer:
c) 6

Samacheer Kalvi 12th Commerce Guide Chapter 8 Securities Exchange Board of India

Question 7.
Pick the odd one out:
a) Voter ID
b) PAN
c) ID card
d) PostCard
Answer:
d) Post Card

Question 8.
which one of the following is not correctly matched?
a) DEMAT – Dematerialisation
b) PAN – Proof
c) SEBI -12 members
d) HQ – Bendrakurla
Answer:
c) SEBI -12 members

Samacheer Kalvi 12th Commerce Guide Chapter 8 Securities Exchange Board of India

Question 9.
Choose the correct statement.
(i) SEBI Act was passed in the year 1992 in Indian Parliament.
(ii) It protects the interest of the Investors.
(iii) It Regulates and controls the stock exchange.
a) (i) is correct
b) (ii) is correct
c) (iii) is correct
d) All (i), (ii) and (iii) are correct
Answer:
d) All (i), (ii) and (iii) are correct
Samacheer Kalvi 12th Commerce Guide Chapter 8 Securities Exchange Board of India

II. Match the following

List-I

List-II

i SEBI 1.Dematerilization
ii DEMAT 2. A Supervisory Body
iii PAN 3.Buying and Selling by director
iv Insider Trading 4. perment Account Number

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Samacheer Kalvi 12th Commerce Guide Chapter 8 Securities Exchange Board of India

III.Assertion and Reason :
1. Assertion (A): DEMAT is done at the request of the investor.
Reason (R): A DEMAT A/c holder can buy or sell any amount of shares.
a) (A) is True (R) is True
b) (A) and (R) are False
c) (A) is True (R) is False
d) (A) is False (R) is True
Answer:
a) (A) is True (R) is True

Question 2.
Assertion (A): SEBI is a supervisory (Apex) Body.
Reason (R): So, It cannot regulates and control the stock exchange.
a) (A) is True (R) is False
b) (A) is False (R) is True
c) Both (A) and (R) are True
d) Both (A) and (R) are False
Answer:
a) (A) is True (R) is False|

Samacheer Kalvi 12th Commerce Guide Chapter 8 Securities Exchange Board of India

IV. Very Short answer questions.

Question1.
What is meant by PAN?
Answer:

  •  PAN – Permanent Account Number.
  •  It is a unique 10 digit alphanumberic identity number.
  •  It also serves as an identity proof.

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