Investors must be safeguarded not only against frauds and cheating but also against the losses arising out of unfair practices. What are the SEBI's regulations for investors' protection in India?

CS Professional · Ethics, Governance and Sustainability · PYQS · December 2016
Investors must be safeguarded not only against frauds and cheating but also against the losses arising out of unfair practices. What are the SEBI's regulations for investors' protection in India?

Answer & Explanation:

One of the important objectives of the SEBI is to provide a degree of protection to the investors and to safeguard their rights, steady flow of savings into market and to promote the development and regulation of the securities market. Investors should be safeguarded not only against frauds and cheating but also against the losses arising out of unfair practices like deliberate misstatement in offer statements to investors, price manipulations or insider trading. SEBI has issued many guidelines and regulations to regulate the capital market and to protect the investors. Some of these guidelines are: SEBI (Ombudsman) Regulation 2003 - designed to redress the investor's grievance against listed companies or intermediaries or both for amicable settlement SEBI (Prohibition of fraudulent and unfair Trade Practices relating to securities market) Regulations 2003 - to prohibit any fraudulent and unfair Trade Practices relating to securities market SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 SEBI (Investor Protection and Education Fund) Regulations, 2009 to establish an Investor Protection and Education Fund which will be used inter-alia, for "aiding investors". SEBI (Prohibition of Insider Trading) Regulations 2015. The basic objective is to prohibit persons who have more access to company's information which can be used to benefit the individual or group of individual or agency. In addition to the above, SEBI has also set up a separate cell to address the grievances of investors - SEBI Complaints Redressal System (SCORES).

Topics: Investor Protection

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