Daily Static Quiz Prelims Practice 2027
SEBI was first set up in 1988 as a non-statutory body and received statutory powers under the SEBI Act, 1992. The year 1988 is the usual trap, since that is when SEBI was established, but only as an administrative body. Options (c) and (d) have no link to SEBI's statutory status.
- The primary market deals with new issues of securities, while the secondary market deals with trading of existing securities.
- The Bombay Stock Exchange, established in 1875, is Asia's oldest stock exchange.
Statement 1 is correct — the primary market raises fresh capital through IPOs and follow-on offers, while the secondary market provides liquidity by allowing investors to trade securities that have already been issued. Statement 2 is correct too, since the BSE, founded in 1875, is Asia's oldest stock exchange.
Option (d) is incorrect — an IPO (Initial Public Offering) is the first sale of shares to the public by an unlisted company, whereas an issue of new shares to existing shareholders is a Rights Issue. Options (a), (b), and (c) are all correct — the Sensex tracks 30 large, actively traded BSE stocks; the Nifty 50 is the NSE's benchmark index; and FPIs must register with SEBI under the FPI Regulations.
- Assertion (A): Commercial Paper is a money market instrument.
- Reason (R): Commercial Paper is issued by the Government of India to meet its short-term borrowing needs.
Assertion A is correct — Commercial Paper (CP) is a short-term money market instrument with a maturity of 7 days to one year. Reason R is incorrect, because CP is issued by corporates, primary dealers and financial institutions, not by the Government; the Government meets its short-term needs through Treasury Bills.
- Mutual funds — SEBI
- Insurance companies — SEBI
- Pension funds under NPS — PFRDA
- Commodity derivatives exchanges — SEBI
Pair 1 is correct — mutual funds are regulated by SEBI. Pair 2 is incorrect — insurance companies are regulated by IRDAI (Insurance Regulatory and Development Authority of India), not SEBI. Pair 3 is correct, as the National Pension System is regulated by PFRDA. Pair 4 is correct too, since the Forward Markets Commission was merged with SEBI in 2015, so commodity derivatives now come under SEBI; students often still link them to the defunct FMC.
