Understanding SEBI's Functions in the Securities Market

The Securities and Exchange Board of India (SEBI) is the regulatory body for securities and commodity markets in India. It was established to protect the interests of investors in securities and to promote and regulate the development of the securities market. SEBI performs various functions, which can generally be categorized into regulatory, developmental, and protective functions.

Regulatory Functions of SEBI

Regulatory functions are those that SEBI performs to regulate the business in the stock markets and ensure fair practices. These include:

• Registering and regulating the working of stock brokers, sub-brokers, share transfer agents, bankers to an issue, trustees of trust deeds, registrars to an issue, merchant bankers, underwriters, portfolio managers, investment advisers, and other intermediaries operating in the securities market.
• Registering and regulating the working of collective investment schemes, including mutual funds.
• Prohibiting fraudulent and unfair trade practices relating to securities markets.
• Regulating substantial acquisition of shares and takeover of companies.
• Calling for information, undertaking inspections, conducting inquiries, and audits of stock exchanges, mutual funds, and other intermediaries and self-regulatory organizations in the securities market.
• Levying fees or other charges for carrying out the purposes of the SEBI Act.
• Performing and exercising such power of the Central Government or any other authority under the Securities Contracts (Regulation) Act, 1956, as may be delegated to it.

Developmental Functions of SEBI

Developmental functions are those that SEBI performs to promote and develop the securities market and its participants. These include:

• Promoting investor education and training of intermediaries of the securities market.
• Conducting research and publishing information useful to all market participants.
• Promoting self-regulatory organizations.

Protective Functions of SEBI

Protective functions are those that SEBI performs to protect the interests of investors. These include:

• Prohibiting insider trading.
• Checking price rigging.
• Promoting fair practices.
• Educating investors.

Analyzing the Given Options

Let's examine each option in the context of SEBI's functions:

1. Registration of Brokers and sub-brokers: As discussed above, registering intermediaries like brokers and sub-brokers is a core responsibility of SEBI to regulate their conduct in the market. This is clearly a regulatory function.

2. Registration of collective investment scheme of mutual funds: SEBI regulates mutual funds and other collective investment schemes to protect investors. Registration is a prerequisite for these schemes to operate legally, making it a regulatory function.

3. Levying fee or other charges for carrying out the purpose of the Act: SEBI needs funds to operate and fulfill its objectives under the SEBI Act. The power to levy fees is granted to SEBI to finance its regulatory activities. This is a function directly linked to its regulatory purpose.

4. Training of intermediaries of securities market: While SEBI is interested in having competent intermediaries, the direct function of 'training' falls under developmental functions. SEBI promotes training and investor education, but conducting the training itself is more about developing market infrastructure and human capital rather than directly regulating activities or entities.

Identifying the Non-Regulatory Function

Based on the classification of SEBI's functions, registering brokers, registering mutual funds, and levying fees are all integral parts of its regulatory oversight. The activity of 'training of intermediaries' is categorized under the developmental functions aimed at improving the overall market environment and participant knowledge.

Therefore, training of intermediaries of the securities market is NOT a regulatory function of SEBI.

Conclusion

The function that is NOT a regulatory function of SEBI among the given options is the training of intermediaries of the securities market. This is considered a developmental function.

Additional Information: The Role of SEBI

SEBI acts as a watchdog for the Indian securities market. Its primary objectives are to protect the interests of investors, regulate the securities market, and promote its development. The SEBI Act, 1992, gives SEBI the powers to fulfill these objectives. By performing its various functions, SEBI aims to create a transparent, safe, and efficient market environment for all participants, including investors, companies, and intermediaries.

Understanding the distinction between SEBI's regulatory, developmental, and protective functions is crucial for comprehending its overall role and impact on the securities market.