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Who was the regulatory body for controlling financial affairs in India before SEBI?
  • a)
    Controller of Capital Issues
  • b)
    Reserve Bank of India
  • c)
    Insurance Regulatory and Development Authority of India
  • d)
    Government of India
Correct answer is option 'A'. Can you explain this answer?
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Who was the regulatory body for controlling financial affairs in India...
Regulatory Body for Financial Affairs in India before SEBI

Before the establishment of SEBI (Securities and Exchange Board of India) in 1988, the regulatory body for controlling financial affairs in India was the Controller of Capital Issues.

Controller of Capital Issues

The Controller of Capital Issues was a regulatory body that was established in 1947 under the Ministry of Finance to control the issuance and pricing of securities in India. It was responsible for regulating the public issues of shares, debentures, and other securities by companies.

Functions of Controller of Capital Issues

The functions of the Controller of Capital Issues were as follows:

1. Regulating the issue of securities: The Controller of Capital Issues regulated the issuance of securities by companies. It determined the price at which securities could be issued and the amount of securities that could be issued.

2. Approving prospectuses: The Controller of Capital Issues had the authority to approve the prospectuses of companies. It ensured that the prospectuses contained all the necessary information about the company and the securities being issued.

3. Monitoring the use of proceeds: The Controller of Capital Issues monitored the use of proceeds from the issuance of securities. It ensured that the funds raised were used for the purpose specified in the prospectus.

4. Enforcing regulations: The Controller of Capital Issues enforced the regulations related to the issuance of securities. It had the power to cancel the registration of companies that did not comply with the regulations.

SEBI

In 1988, SEBI was established to replace the Controller of Capital Issues. SEBI is a statutory body that regulates the securities market in India. It works to protect the interests of investors and promote the development of the securities market.

Conclusion

The Controller of Capital Issues played an important role in regulating the issuance of securities in India before SEBI was established. Its functions have now been taken over by SEBI, which has a wider mandate to regulate the securities market in India.
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Similar CA Foundation Doubts

Features of a Mixed Economy:A mixed economy is an economic system that combines elements of both a market economy and a planned economy. It incorporates features of both private enterprise and government intervention. The correct answer is D, as all of the following features are characteristic of a mixed economy:1. Planned economy:A mixed economy includes elements of a planned economy, where the government plays a role in guiding and regulating economic activities. It formulates economic plans and policies to ensure the efficient allocation of resources and to promote economic stability.2. Dual system of pricing:In a mixed economy, there exists a dual system of pricing, which means that both market prices and government-set prices coexist. While market forces determine prices for most goods and services, the government may intervene to regulate prices in certain sectors to protect consumers or promote social welfare.3. Balanced regional development:Another characteristic of a mixed economy is the emphasis on balanced regional development. The government intervenes to ensure that economic growth and development are not concentrated in specific regions or industries but are spread across different regions and sectors. This helps to reduce regional disparities and promote overall economic stability and social welfare.Benefits of a Mixed Economy:A mixed economy offers several benefits due to its combination of market forces and government intervention. Some of these benefits include:1. Economic efficiency:By incorporating market mechanisms, a mixed economy allows for resource allocation based on supply and demand, which promotes economic efficiency. Market forces encourage competition, innovation, and productivity, leading to higher levels of economic growth.2. Social welfare:Government intervention in a mixed economy enables the provision of public goods and services that may not be adequately provided by the market alone. This includes areas such as healthcare, education, infrastructure, and social security, ensuring a certain level of social welfare and equity.3. Stability and regulation:The government's role in a mixed economy helps to maintain economic stability through macroeconomic policies such as fiscal and monetary measures. It also regulates certain sectors to prevent market failures, protect consumer rights, and ensure fair competition.Conclusion:A mixed economy combines the advantages of both market forces and government intervention. It allows for economic efficiency, social welfare, and stability. The features of a mixed economy include elements of a planned economy, a dual system of pricing, and balanced regional development. These features work together to create a system that promotes both economic growth and social welfare.

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Who was the regulatory body for controlling financial affairs in India before SEBI?a)Controller of Capital Issuesb)Reserve Bank of Indiac)Insurance Regulatory and Development Authority of Indiad)Government of IndiaCorrect answer is option 'A'. Can you explain this answer?
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