ClearMains
CAS mechanism provides SEBI with greater capabilities to identify manipulation compared with the earlier Volume Weighted Average Price (VWAP)-based system.
Quick Revision
Prelims-testable facts
Trap alerts
Mains Practice Question
Discuss the significance of SEBI's Computer Aided Surveillance (CAS) mechanism in detecting market manipulation.
250 words
Practice this in the exam hall →Prelims Practice MCQs
Which body is responsible for regulating the securities market?
SEBI is the primary regulator of the securities market in India, responsible for maintaining fair and transparent market practices.
What is the replacement for the earlier Volume Weighted Average Price (VWAP)-based system?
The CAS mechanism is a more advanced system for detecting market manipulation, replacing the earlier VWAP-based system.
Where is the Securities and Exchange Board of India (SEBI) based?
SEBI is headquartered in Mumbai, serving as the central hub for its regulatory activities.
Consider the following statements regarding SEBI's CAS mechanism: 1. SEBI's CAS mechanism is a replacement for the older system. 2. SEBI's CAS mechanism is run by the Reserve Bank of India. 3. SEBI's CAS mechanism provides greater capabilities to identify market manipulation compared with the earlier system. How many of the above statements are correct?
Statement 1 is correct because the fact list states that the CAS mechanism is a replacement for the earlier Volume Weighted Average Price (VWAP)-based system. Statement 2 is incorrect because the fact list states that SEBI's CAS mechanism is run by SEBI, not the Reserve Bank of India. Statement 3 is correct because the fact list states that the CAS mechanism provides greater capabilities to identify market manipulation compared with the earlier system.
Consider the following two statements: Statement-I: SEBI's CAS mechanism provides greater capabilities to identify market manipulation compared with the earlier Volume Weighted Average Price (VWAP)-based system. Statement-II: SEBI will take strict action against market manipulators because it has a more effective mechanism to detect them. Which one of the following is correct in respect of the above statements?
Statement 1 is correct because the fact list states that the CAS mechanism provides greater capabilities to identify market manipulation compared with the VWAP-based system. Statement 2 is correct because the fact list states that SEBI will take strict action against market manipulators, and Statement 1 explains why this is possible. The fact list does not provide a direct causal link, but it is reasonable to infer that the improved mechanism is the reason for the promise of strict action.