Identify the function performed by SEBI:

”It controls insider trading, takeover bids and imposes penalties for such practices.”

The correct option is Regulatory functions.

To understand why this statement represents the regulatory functions of the Securities and Exchange Board of India (SEBI), we can break down SEBI's main categories of functions:
SEBI performs three key types of functions to achieve its objectives: Protective functions, Regulatory functions, and Developmental functions.

Regulatory Functions of SEBI:
These functions are designed to regulate the business in stock exchanges and ensure orderly operations of the securities market. They include:
1. Framing rules, regulations, and a code of conduct for financial intermediaries like brokers and sub-brokers.
2. Regulating company takeovers and takeover bids to ensure transparency.
3. Exercising legislative, judicial, and executive powers to monitor market activities, perform audits, and impose penalties for non-compliance or malpractices.
Therefore, controlling takeover bids, managing market operations, and enforcing rules through penalties directly align with the Regulatory functions of SEBI.