Daily Current Affairs : 23-November-2023

Recently, the Securities and Exchange Board of India (SEBI) took a significant step in fortifying investor protection and market stability by launching a safety net for investors and traders.

Collaborative Development:

The safety net platform is a collaborative effort involving all major stock exchanges, including the Bombay Stock Exchange, National Stock Exchange, and Metropolitan Stock Exchange of India. This joint initiative aims to establish a robust mechanism to address technological challenges faced by trading members and stock brokers registered with SEBI.

Purpose and Functionality:
  • The platform serves as a safeguard for investors in the event of technological glitches faced by trading members.
  • Its primary objective is to mitigate risks by facilitating the cancellation of pending orders rather than initiating new positions or orders.
Accessibility and Limitations:
  • Accessible to trading members supporting internet-based trading and wireless technology for investors.
  • Not available for algo trading and institutional clients, emphasizing a focus on retail investors’ protection.
Investor Access:
  • Investors can utilize the Investor Redressal and Arbitration (IRRA) platform through a dedicated mobile application and web URL designed for Internet-based trading (IBT).
About SEBI:
  • Securities and Exchange Board of India (SEBI) is a statutory authority overseeing securities and financial markets.
  • Regulating various segments, including stock exchanges, mutual funds, securities intermediaries, and credit rating agencies.
  • Formulates policies, rules, and regulations to ensure fair and transparent functioning of entities within its purview.
  • Mandates registration and regulation of market intermediaries, such as brokers, sub-brokers, merchant bankers, and portfolio managers.
  • Ensures market transparency through mandates on disclosures related to financial results, corporate governance, and insider trading.
Important Points:
  • Recent Initiative:
    • SEBI recently launched a safety net platform for investors and traders.
  • Collaborative Development:
    • Developed jointly by major stock exchanges: Bombay Stock Exchange, National Stock Exchange, Metropolitan Stock Exchange of India, etc.
  • Purpose and Functionality:
    • Acts as a safeguard for investors in case of technological difficulties faced by trading members.
    • Focuses on mitigating risks by facilitating the cancellation of pending orders, not initiating new positions or orders.
  • Accessibility and Limitations:
    • Accessible to trading members supporting internet-based trading and wireless technology.
    • Not available for algo trading and institutional clients, emphasizing protection for retail investors.
  • Investor Access:
    • Investors can use the platform through a dedicated mobile application and web URL designed for Internet-based trading (IBT).
  • About SEBI:
    • Securities and Exchange Board of India (SEBI) is a statutory authority overseeing securities and financial markets.
    • Regulates various segments, including stock exchanges, mutual funds, securities intermediaries, and credit rating agencies.
    • Formulates policies, rules, and regulations for fair and transparent functioning.
    • Mandates registration and regulation of market intermediaries like brokers, sub-brokers, merchant bankers, and portfolio managers.
    • Ensures market transparency through mandates on disclosures related to financial results, corporate governance, and insider trading.
Why In News

Recently, the Securities and Exchange Board of India (SEBI) took a significant step towards investor protection by launching a safety net for investors and traders. This initiative reflects SEBI’s commitment to fostering a secure and transparent investment environment, ensuring the financial well-being of market participants.

MCQs about SEBI’s Safety Net

  1. What is the primary purpose of SEBI’s safety net platform?
    A. Initiating new positions and orders
    B. Facilitating the cancellation of pending orders
    C. Supporting algo trading exclusively
    D. Regulating institutional clients
    Correct Answer: B. Facilitating the cancellation of pending orders
    Explanation: The platform’s main objective is to mitigate risks by facilitating the cancellation of pending orders, not initiating new positions or orders.
  2. Who collaborated in the development of SEBI’s safety net platform?
    A. SEBI and RBI
    B. National Stock Exchange and Bombay Stock Exchange
    C. Ministry of Finance and Securities Intermediaries
    D. National Securities Depository Limited and Central Depository Services Limited
    Correct Answer: B. National Stock Exchange and Bombay Stock Exchange
    Explanation: The safety net platform was jointly developed by major stock exchanges, including the Bombay Stock Exchange and National Stock Exchange.
  3. Which type of trading members have access to the safety net platform?
    A. Only those using wireless technology
    B. Exclusively institutional clients
    C. Members supporting internet-based trading
    D. Algo trading members
    Correct Answer: C. Members supporting internet-based trading
    Explanation: The platform is accessible to trading members supporting internet-based trading and wireless technology.
  4. What is the role of SEBI in ensuring market transparency?
    A. Initiating new policies for stock exchanges
    B. Facilitating corporate mergers
    C. Mandating disclosures related to financial results
    D. Regulating credit rating agencies exclusively
    Correct Answer: C. Mandating disclosures related to financial results
    Explanation: SEBI ensures market transparency by mandating disclosures related to financial results, corporate governance, and insider trading.

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