Infrastructural Financial Markets

Submitted to Nitesh Nanavati Sir

United World School of Law

Student Details

Name : Helik Soni

Roll No : 1007al0027
Batch : 2020-2025
Section : A

Name : Yash Butaney

Roll No : 1007AL0092
Batch : 2020-2025
Section : A
Contents
Introduction:..........................................................................................................................................3
SEBI's Role in Investor Protection:.........................................................................................................4
Investor Protection Measures by SEBI...................................................................................................5
Facilitate redressal of investor grievances.............................................................................................6
Investor Education and Protection Fund:..............................................................................................7
How Investors complain is resolved in SEBI?.........................................................................................8
Conclusion:............................................................................................................................................9
References –........................................................................................................................................10
Introduction:

SEBI is a statutory regulatory body that was established on April12, 1992. It monitors
and regulates the Indian capital and securities markets, ensuring that investors'
interests are protected by developing regulations and guidelines. EBI's headquarters
are in Mumbai's Bandra Kurla Complex, and it has Northern, Eastern, Southern, and
Western Regional Offices in New Delhi, Kolkata, Chennai, and Ahmedabad.

The term "investor protection" refers to a method or mechanism for safeguarding an

investor's interests in the securities market. It refers to actions taken with the goal of
increasing and maintaining procedural transparency when dealing with investors
through regulatory bodies.

According to the SEBI Act of 1992, investor protection is defined as "protecting the
interests of investors in securities, promoting the development of, and regulating, the
securities market, and for matters connected therewith."

Hence, the term "investor protection" refers to the steps and measures that must be
taken to protect the interests of investors, such as enacting appropriate legislation,
establishing regulatory bodies, or passing regulations or guidelines.
SEBI's Role in Investor Protection:

SEBI has issued various methods and measures to ensure investor protection on a
regular basis. It has issued numerous directives, spearheaded numerous investor
awareness campaigns, and established an investor protection Fund (IPF) to protect
investors.
 Guidelines: SEBI has issued guidelines to companies bringing them up to
speed new market issues mutual funds, portfolio managers, merchants,
Bankers, underwriters, and lead managers, for example. These guidelines are
intended for enhancing transparency in their operations, as well as avoiding
Investors are being exploited in one way or another. SEBI has implemented a
Code of advertising for public issues to ensure fair and truthful representation
disclosures. The underwriting is done to reduce the cost of the issue. SEBI
monitors all intermediaries to ensure that they are following the guidelines
correctly. When the guidelines are not followed, the panel takes action.
 Investor education: SEBI recognises the importance of investor education for
his protection. It promotes the formation of investor associations, which
disseminate information via news-letters. SEBI is releasing investors receive
two monthly publications.
 Public Interest Advertisement: SEBI issues public interest advertisements to
educate investors on the fundamental characteristics of various instruments
and the minimum precautions they should take before investing. The SEBI
wishes to raise investor awareness about their rights and possible solutions if a
problem arises.
 Investor’s Complain: If investors have issues with their investments in
industrial securities or financial assets, they can file a complaint with SEBI.
SEBI receives tens of thousands of complaints about the non-receipt of refund
orders, allotment letters, dividends or interest, and delays in the transfer of
shares and securities debentures.
 Introduction in Stock Investing: This new instrument, developed in
collaboration with banks, provides protection to investors because they receive
interest on the application money until it is allotted. SEBI has introduced stock
invest as a new tool for submitting share applications.
 Surveys Of Investor: SEBI has also conducted surveys on investment and
opportunities for small investors' benefit. The survey results are widely
publicised in order to provide adequate and Investors are given advice on their
investment decisions.
Investor Protection Measures by SEBI

Investor protection legislation is implemented under the Section 11(2) of the SEBI
Act. The measures are as follows:

 Stock Exchange and other securities market business regulation.

 Registering and regulating the intermediaries of the business-like brokers, transfer

agents, bankers, trustees, registrars, portfolio managers, investment consultants,
merchant bankers, etc.

 Recording and monitoring the work of custodians, depositors, participants, foreign

investors, credit rating agencies, etc.

 Registering investment schemes like Mutual fund & venture Capital funds, and
regulating their functioning.

 Promotion and controlling of self-regulatory companies.

 Keeping a check on frauds and unfair trading methods related to the securities
market.

 Observing and regulating major transactions and take-over of the companies.

 Carry out investor awareness and education programme.

 Train the intermediaries of the business.

 Inspecting and auditing the security exchanges (SEs) and intermediaries.

 Assessment of fees and other charges.

Facilitate redressal of investor grievances

 SEBI a comprehensive mechanism to facilitate redressal of investor

grievances against intermediaries and listed companies.

 It follows up with companies and intermediaries who do not redress investors’

grievances, by sending reminders to them and having meetings with them.

 It takes appropriate enforcement actions as provided under the law.

 The stock exchanges have investor protection funds to compensate investors

when a broker is declared a defaulter

 Depository indemnifies investors for loss due to negligence of depository or

depository participant.

 To facilitate replies to various queries of the general public on matters relating

to securities market, SEBI has undertaken a new initiative and launched toll
free help services number 1800 266 7575 0r 1800 22 7575

 SCORES – SEBI complaints Redress system facilitates investors to lodge their

complaint online with SEBI and subsequently view its status.
Investor Education and Protection Fund:
The central government (GOI) has established the Securities and Exchange Commission
(SEC) to protect the interests of investors in securities, promote the development of, and
regulate the securities market, and for matters connected with or incidental thereto a fund to
be known as the Investor Education and Protection Fund.
Objectives:
 Educating investors on how the market works. Educating investors so that they can
analyse and make informed decisions.
 Educating investors about the market's volatility.
 Making investors aware of their rights and the various laws governing investing.
 Promoting research and surveys to disseminate knowledge investors.
Funding:
Except for points (f) and (g), the following amounts will be included in IEPF if they
remain unpaid for seven years from the date of declaration:
a. Amounts in companies' unpaid dividend accounts;
b. Application moneys received by companies for allotment of any securities that are
due for refund;
c. Matured corporate deposits;
d. Matured corporate debentures;
e. Interest on the amounts referred to in clauses (a) to (d).
f. Central Government Grants and Donations to the Fund Government, state
governments, businesses, or any other entity institutions for the Fund's purposes; and
g. The interest or other income earned from investments made coming from the Fund.

Utilisation of Funds:
 To refund the application money due for refund and interest on unclaimed
dividends, matured deposits, and matured debentures;
 Investor education, awareness, and protection should be promoted;
 Any disgorged amount will be distributed to eligible and identifiable
applicants for shares or debentures, shareholders, debenture holders, or
depositors who have suffered losses as a result of any wrongdoing by any
party. person, in accordance with the Court's orders, disgorgement was
ordered;
How Investors complain is resolved in SEBI?

Investors who are dissatisfied with the Stock Exchanges'/Depositories' responses to

their grievances can file a complaint with SEBI. Complaints filed against stock
brokers and depository participants are registered with the appropriate stock
exchange. SEBI monitors the depository for redress through periodic reports. Other
intermediaries' complaints are taken up with them directly for redress, and SEBI
keeps a close eye on them. Disputes involving publicly traded companies are handled
by the respective publicly traded company. The business is obligated to form an
Action Taken Report, respond in the prescribed format (ATR). The status of
grievances is updated upon receipt of ATR. When the company's response is
insufficient or inadequate, follow-up action is taken. If the situation is not satisfactory,
appropriate enforcement actions (adjudication, direction, etc.) will be taken. SEBI has
a dedicated department called the Office of Investor Assistance and Education
(OIAE) that handles investor complaints and educates investors.
Conclusion:

Investor protection is one of the most frequently discussed topics in the securities
market. One of the regulatory bodies' top priorities is to protect the interests of
investors. SEBI has clearly implemented some stringent measures to protect investors.
The guidelines and measures are put in place to ensure that every aspect of the
investor's interest is protected. But there is still a lot of work to be done. The investor
education programme has undoubtedly aided and will continue to do so. These
measures are simply a step in the right direction toward a clean and transparent
transaction. To truly secure the securities market, issuers and investors must adhere to
the guidelines.
References –

1 www.sebi.gov.in
2 Economictimes.indiatimes.com
3 www.fincash.com
4 www.investopedia.com
5 www.indiamoney.com
6 www.scores.com
7 www.amsshardul.com