Refer - Business Line
Enrich the answer from other sources, if the question demands.
IAS Parliament 5 years
KEY POINTS
· SEBI manages its own Investor Protection and Education Fund carved out of its profits and sums forfeited from de-recognised stock exchanges.
· As per its last published accounts for FY17, it managed Rs 108 crore and spent roughly Rs 20 crore on investor education.
· Every stock exchange is required to create an Investor Protection Fund out of turnover fees and fines levied from members.
· While their primary purpose is to compensate retail investors after broker default, surpluses go into investor education.
· NSDL and CDSL chip in with their own Investor Protection Funds, contributing 5 per cent of their profits and penalties from market participants.
· With very little financial information about these funds in the public domain, it is hard to say how much money they’re sitting on, or how they spend it.
Better ways of utilizing the fund
· Financial market regulators including RBI, IRDAI and PFRDA need to get together with the Ministry of Corporate Affairs to see how all the publicly-funded investor education initiatives can be pooled together and monitored, so that there is little wastage and duplication of efforts. SEBI could be a good choice to oversee this money, as it has been a more efficient user of it than the MCA.
· Once this is done, with RBI’s active collaboration, it can work to broad-base the current IAPs and print content to include explainers on interest rates, loan pricing, personal finance, insurance, banking or digital transactions, across multiple Indian languages.
· Investor education initiatives went beyond creating generic content designed to induce the novice investor into taking his first step into equities or funds.
· For stock investors, creating a free, easily searchable database of company annual reports and quarterly financials will be an immensely helpful tool.
· Stock exchanges on their part, must be induced to put basic information about indices and trading activity in the public domain, instead of trying to monetise every scrap of data.
· Finally, all entities collecting retail money in the name of investor education must be mandated to put their latest audited accounts in the public domain.
K. V. A 5 years
Pls review
IAS Parliament 5 years
Good answer. Keep writing.
Deepesh 5 years
Kindly review
IAS Parliament 5 years
Good attempt. Keep writing.
Shashwat 5 years
Kindly review
IAS Parliament 5 years
Try to include about displaying indices, trading activities by stock exchanges. Keep writing.
Neha 5 years
Please review!
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IAS Parliament 5 years
Try to elaborate more on better ways to use the fund instead of listing out; ex - stock exchange to display about basic information on indices, trading activities etc. Keep writing.
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