{"id":1969,"date":"2020-01-08T12:37:04","date_gmt":"2020-01-08T12:37:04","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=1969"},"modified":"2021-04-12T17:41:57","modified_gmt":"2021-04-12T12:11:57","slug":"sebi-protecting-investors-right","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/sebi-protecting-investors-right\/","title":{"rendered":"How SEBI Protects Investor Right?"},"content":{"rendered":"\n<p class=\"has-drop-cap\">Investors are one of the pillars of the Financial and Securities market and protection of these investors is one of the essential elements of progressing securities market or any other financial investment institution. They invest their money in the stock market to help market growth and thus the economy, which will provide better returns. <a href=\"https:\/\/corpbiz.io\/learning\/investor-education-and-protection-fund-iepf\/\"><strong>Investor protection<\/strong><\/a> mainly focuses that the Investors are fully informed about their purchases, transactions, affairs of the company that they have invested in. To protect the interest of these investors, Government of India formed the body called SEBI (Securities and Exchange Board of India). Here, in this blog, we will see the investor\u2019s protection measures by\u00a0SEBI\u00a0in detail.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title ez-toc-toggle\" style=\"cursor:pointer\">Page Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/corpbiz.io\/learning\/sebi-protecting-investors-right\/#What_are_the_mandatory_points_that_an_investor_must_know_before_investing\" >What are the mandatory points that an investor must know before investing?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/corpbiz.io\/learning\/sebi-protecting-investors-right\/#What_are_the_Objectives_of_SEBI_in_regards_to_investor_protection\" >What are the Objectives of SEBI in regards to investor protection?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/corpbiz.io\/learning\/sebi-protecting-investors-right\/#General_things_to_consider_for_the_Investors\" >General things to consider for the Investors<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/corpbiz.io\/learning\/sebi-protecting-investors-right\/#What_are_the_Investor_Protection_Measures_by_SEBI\" >What are the Investor Protection Measures by SEBI?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/corpbiz.io\/learning\/sebi-protecting-investors-right\/#Conclusion\" >Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_are_the_mandatory_points_that_an_investor_must_know_before_investing\"><\/span>What are the mandatory points that an investor must know before investing?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Investing your hard-earned money\nin the security market is quite risky if you are not aware of the company in\nwhich you are investing.<\/p>\n\n\n\n<p><strong><em>The investor\nmust be aware of the following points before investing in any company\u2019s share\nmarket.<\/em><\/strong><\/p>\n\n\n\n<ul><li>He\/she must have in-depth knowledge of the market.<\/li><li>The market is safe, and there are no miscreants at the time of investment.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_are_the_Objectives_of_SEBI_in_regards_to_investor_protection\"><\/span>What are the Objectives of SEBI in regards to investor protection?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><strong><em>SEBI has four\nelements in its investor protection strategy which are listed below:<\/em><\/strong><\/p>\n\n\n\n<ul><li>SEBI ensures that investors learn how to invest in a share market and obtain useful information required for investing. The investor, before investing, must evaluate various investment options that suit his\/her specific goal in the long term.<\/li><li>With a perspective to help these investors, SEBI has organised\u00a0investor education and awareness workshops. In addition to this, SEBI has encouraged market participants to organise similar programmes. SEBI also maintains an updated website to provide training to these investors and uses the digital platform to publish various kinds of cautions<\/li><\/ul>\n\n\n\n<ul><li>SEBI has made relevant details available for investment in a public domain so that the investor can make informed investment decisions based on the initial and continuous disclosures. Under this framework, both the issuers and intermediaries disclose relevant details about themselves, products, markets and regulations.<\/li><li>It ensures that the market has systems and practices, which in turn will make the transactions safe and more accessible for the investors. Various measures such as screen-based trading system, dematerialization of securities, T+2 rolling settlement has been introduced by SEBI to regulate the intermediaries, and for issuance and trading of securities. Every investor must comply with the      prescribed standard, and any miscreants are welcomed with strict      punishment.<\/li><li>To facilitate the redressal of investor\u2019s grievances, SEBI came up with a comprehensive mechanism to address the grievances of the investors against the listed companies and intermediaries. SEBI follows up with the companies and intermediaries who do not redress the investor\u2019s grievances by sending reminder emails and conducting meetings with them.<\/li><\/ul>\n\n\n\n<p>Also, the stock exchanges have investor protection funds to compensate investors when the broker is declared as default.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"General_things_to_consider_for_the_Investors\"><\/span>General things to consider for the Investors<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul><li>The\ninvestors should always deal with the intermediaries that are registered with\nthe SEBI or stock exchanges.<\/li><li>Always\nkeep copies of all investment documentation like the application forms, the\ncontract notes and acknowledgement slips.<\/li><li>The\ninvestors should always keep with themselves the copies of documents that they\nare sending to companies.<\/li><li>They\nmust send the important documents by registered post or any reliable mode so as\nto ensure deliver.<\/li><li>They\nmust make sure that they are holding securities before they sell.<\/li><li>They\nmust ensure to give comprehensible and unambiguous instruction to Trading\nMember or agent<\/li><li>They\nshould adopt trading or investment strategies without risk-bearing capacity.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_are_the_Investor_Protection_Measures_by_SEBI\"><\/span>What are the Investor Protection Measures by SEBI?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><strong><em>The\ninitiatives taken by SEBI to protect the rights of investors are listed below:<\/em><\/strong><\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Simplification of Share transfer and its Allotment Procedure<\/h3>\n\n\n\n<p>Under the chairmanship of Shri R. Chandrasekaran,\nSEBI has suggested a procedure to simplify the transfer of shares and its\nallotment procedures. The report made by the committee has been circulated to\nvarious market intermediaries. After receiving the feedback from these market\nintermediaries, the report will be finalised, and the necessary steps will be\ntaken to implement the recommendations. This, in turn, would considerably ease\nthe difficulties faced by the investors on account of excessive delays in share\ntransfers and wrong deliveries.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Unique Order Code Number<\/h3>\n\n\n\n<p>To protect the investor\u2019s rights,\nall&nbsp;<strong>stock exchanges<\/strong><a href=\"https:\/\/en.wikipedia.org\/wiki\/Stock_exchange\"><sup>[1]<\/sup><\/a>&nbsp;are required to intimate a unique\norder code number to their client. After the execution of this order, a number\nis printed on the contract note.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Time-Stamping of Contracts<\/h3>\n\n\n\n<p>When a client places an order,\nStock Exchange of the particular company assigns a Unique Order Code Number for\neach transaction held, which is conveyed by the broker to his\/her client. After\nthe execution of the order, order code number is printed on the contract note.\nThe time stamping of contracts ensures that the broker gives preference\naccording to the execution of the client\u2019s order and charges the correct price\nto his\/her client.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Role of Sub-Brokers<\/h3>\n\n\n\n<p>To ease the process, brokers\noperate through a network of sub-brokers who act as an essential link between\nthe brokers and the investors. As per the SEBI Regulations, 1992 it is\nmandatory for the sub-brokers to get themselves registered, but only 1798\nsub-brokers are registered with SEBI.&nbsp; To safeguard or protect the\ninterest of these investors and bring the sub-brokers under the regulatory\nframework of SEBI, the following measures have been taken:<\/p>\n\n\n\n<ol><li>Remisier is the agent of brokers\nregistered with the stock exchange. They are not authorized to issue a contract\nnote to the investor as brokers are responsible for the issuance of the\ncontract. Hence, these efforts by brokers and the remisier help in protecting\nthe interest of the investors.<\/li><li>Transfer deeds having rubber stamps on\nits reverse side other than those of clearing members of the stock exchanges,\nclearing houses, clearing corporations, the registered sub-brokers and\nremisiers with the SEBI become bad delivery in the stock exchanges for all the\ntransfer deeds.<\/li><li>A registered broker cannot deal with a\nsub-broker who is not registered with SEBI. It becomes the responsibility of\nthe broker to ensure that his\/her client is not working as a sub-broker till\nthe time that the broker is registered with SEBI.<\/li><\/ol>\n\n\n\n<h3 class=\"wp-block-heading\">Investor Protection Fund<\/h3>\n\n\n\n<p><strong><em>SEBI has\nprovided relief to its investors by providing a claim against the single claim\nof an investor which is listed below:<\/em><\/strong><\/p>\n\n\n\n<ol><li>The amount of compensation available\nagainst an individual claim of an investor coming out of default has been\nincreased to INR 1 Lakh in case of major stock exchanges.<\/li><li>In case of smaller stock exchanges, the\namount of compensation provided is INR 25000 viz. Gauhati, Bhubaneshwar, Magadh\nand Madhya Pradesh.<\/li><li>In case of other stock, the amount of\ncompensation provided is INR 50,000.<\/li><\/ol>\n\n\n\n<h3 class=\"wp-block-heading\">Process of solving Investors\u2019 grievances<\/h3>\n\n\n\n<p>BSE has recognized an authority Investors\u2019 Services Cell (ISC) to redress Investor\u2019s grievances. The ISC has played a fundamental role in enhancing and maintaining Investors\u2019 confidence and trust by resolving their grievances against the listed companies or against Members of the BSE.<br> <br> Investors can submit their complaints to the concerned Regional Arbitration Centre of BSE in the Complaint prescribed format. The proper complaint Filing at the respective Regional Arbitration Centre will complete the complaint process expeditiously.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Investor protection is among the most rationalized topics in the Financial and Securities market. It becomes the responsibility of SEBI to provide proper assistance to the investors investing in the share market so that their hard-earned money does not go in waste. To protect the investors right, SEBI has launched a slogan \u201cAn informed investor is a safe investor\u201d thus emphasizing on every aspect of the investor interest. This initiative by SEBI and various other investor awareness programme conducted by SEBI has undoubtedly helped the investors to make a transparent transaction.<\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/alternative-investment-funds-and-popular-across-the-globe\/\">What are Alternative Investment Funds and why they are becoming increasingly popular across the Globe?\n<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Investors are one of the pillars of the Financial and Securities market and protection of these investors is one of the essential elements of progressing securities market or any other financial investment institution. They invest their money in the stock market to help market growth and thus the economy, which will provide better returns. Investor [&hellip;]<\/p>\n","protected":false},"author":6,"featured_media":1970,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[160],"tags":[258],"acf":{"service_id":"227"},"authorName":"Shalini Singh","authorImageUrl":"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2019\/09\/MEE.jpeg","authorDescription":"Shalini is a B.tech graduate but her keen interest in writing impelled her to continue as a content writer. Further, She has a rich experience in Companies Act and Ammendment related topics.","postViews":15173,"readingTime":5,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/1969"}],"collection":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/comments?post=1969"}],"version-history":[{"count":20,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/1969\/revisions"}],"predecessor-version":[{"id":28863,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/1969\/revisions\/28863"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/1970"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=1969"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=1969"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=1969"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}