INVESTORS PROTECTION IN INDIA

INVESTOR PROTECTION IT IS THE EFFORT TO MAKE SURE THAT THOSE WHO INVEST THEIR MONEY IN REGULATED FINANCIAL PRODUCT ARE NOT DEFRAUDED BY BROKERS OR OTHER PARTIES.

NEED FOR INVESTOR’S PROTECTION THEY WILL INVEST ONLY IF THEY FEEL SECURE. ALL INVESTORS DON’T HAVE ADEQUATE KNOWLEDGE. INVESTORS MAY NOT BE FULLY AWARE OF PRECAUTION. THEY MAY NOT BE FAMILIAR WITH RIGHTS AND OBLIGATION.

INITIATIVES TAKEN BY SEBI : ISSUE OF GUIDELINES. PUBLIC INTEREST ADVERTISEMENTS. INVESTORS COMPLAINT CELL. INVESTOR EDUCATION. INVESTOR SURVEYS. ADVERTISING CODE.

ARBITRATION PROCEDURE For solving the problem between investors and brokers an arbitration is constituted with the approval of SEBI. The application of arbitration has to be filed at the REGIONAL ARBITRATION CENTRE[RAC]. A set of arbitration document is sent to the other party for giving its counter reply.

After completion of arbitration of formalities the matter is fixed for hearing before arbitrators . The date of hearing is fixed and the concerned parties are informed through notices. After hearing to both parties the arbitrator closes the reference and decision is given.

ARBITRATION COMMITTEE

COMPANY LAW BOARD [CLB] CLB was constituted on 31 MAY 1991. Many powers which were exercised by high court earlier have now been entrusted TO CLB. Members of CLB are appointed by central government, not to exceed nine. One of the member is appointed as chairman. Maximum age limit for chairman is 65 and for other members it is 62.

Powers of CLB while hearing a case Inspection of documents. Enforcing attendance of witnesses. Compelling production of documents or other material objects . Examining witnesses on oath. Granting of adjournments.

CLB PROCEDURE Documents and form of petition to be attached with the petition. Every reference under clause(c) of sub-section (4) of section 22A of the act as referred to in sub –section (5) of that section ,shall be in FORM NO. 10 of appendix 1. It shall also be accompanied by such documents and enclosures as are specified in appendix 11 to the company law board rules ,1986. Fee on application and petition are payable along with petition. The language of CLB can either english or hindi.

CIVIL COURTS A civil court handles LEGAL DISPUTES that are not crimes. Civil couts have jurisdiction to try all suits of civil nature , except where their jurisdiction has been specifically excluded.

Investor protection fund INVESTOR PROTECTION FUND is set up to meet the claims of investors against defaulter members , in accordance with the guidelines issued by MINISTY of FINANCE, GOVERNMENT of INDIA. The maximum amount of claim payable from the is Rs. 10 lakh .

The fund receives its allocations from following sources: Amounts in the unpaid dividend accounts of the companies. The application money received by companies. Matured deposits with companies. Matured debentures with companies. Grants and donations given to the fund by central government , state government , or any other institutions.

Interest accrued on the amounts. Sale proceeds of fractional shares arising out of issuance of bonus shares ,merger and amalgamation for seven or more years.