A RESEARCH PROJECT on

Investors protection in India

SUBMITTED IN PARTIAL FULFILLMENT OF DEGREE OF MASTERS OF BUSINESS ADMINISTRATION
SESSION (2011-2013)

Under the Submitted by: Dr.Tapen Gupta faculty

supervision Ritika Sharma MBA 4th sem

of:

SUBMITTED TO GURU NANAK INSTITUTE OF MANAGEMENT MULLANA(AMBALA) (KURUKSHETRA UNIVERSITY, KURUKSHETRA)

CERTIFICATE
This is to certify that Ritika Sharma student of GURU NANAK INSTITUTIONS OF MANAGEMENT has completed the project report titled INVESTORS PROTECTION IN INDIA. In the partial fulfillment of the completion of MBA course as prescribed by the norms set by K URUKSHETRA UNIVERSITY. This project report is the record of authentic work carried out by her during the last semester of M.B.A. She has done work under my guidance.

Signature of the Guide

ACKNOWLEDGEMENT
At the delightful movement of presenting my project, first of all, I bow to almighty GOD for blessing me with enough courage and patience to go through this challenging phase of my life. I am extremely thankful to my honrable Guide, for creative guidance, valuable suggestions, inspiring attitude and constant encouragement during the course of research and preparation of project. I would like to thank the members and customers of banks for their whole hearted cooperation. Without their existence this project never has taken shape. I would like to say thanks to all of them who helped me throughout the research.

DECLARATION
I hereby declare that the research work carried out by me in the project titled INVESTORS PROTECTION IN INDIA is a record of an original work done by me under the guidance of Dr TAPEN GUPTA . The results embodied in this report have not been submitted to any other University or Institute for the award of any degree or diploma.

CONTENTS

Chapter No:

Topic Name:

INTRODUCTION:1
Rights of investor: Rights of a shareholder as an investor A debentures holder has the following rights Investors responsibility: Safeguard For Investors Investor Rights and Obligations Where to Invest? Role And Status Of Brokers and sub Brokers: Brokers Registered With SEBI Rule or Regulations for Brokers Status Of Investors Grievances/Redressal System: Process of solving investors grievances Investors grievances against Listed Companies

2. 3.

LITERATURE SURVEY RESEARCH METHODOLOGY

4.

ANALYSIS, INTERPRETATION & FINDING

5.

LIMITATIONS & SUGGESTIONS OF THE STUDY

6.

BIBLIOGRAPHY

7.

ANNEXURE

Chapter -1 INTRODUCTION

INTRODUCTION

Investors protection is as important an issue in India today as it was in 1980s and 1990s but the whole complexion of the problem has changed. The structure as well as the functioning of the Indian securities market has been transformed beyond recognition since the 1990s. The profile of the investing public, the investment choices available, the market environment and the nature of problems bothering the investors are substantially different today from what they were 10-20 years ago. The Ministry of Company Affairs had sponsored this massive study under the Investor Education and Protection Fund (IEPF) with the object of creating a deeper understanding of the ordinary investors concerns, problems and needs. The first five months of the calendar year has seen a total addition of 7.52 lakh new investor accounts by the country two depositories, taking the total numbers of investor accounts to above 75 lakh, according to the data available with the depositaries.

INTRODUCTION OF INVESTOR:
An investor in securities is people who identify himself with the national economy. One who invests in the growth of economy, one who risks a portion of savings, and invests in those sectors, which are likely to grow in tandem with the economy or faster than that. An investor in securities can therefore be defined as a person who invests his invisible surplus in securities, with the following objectives: To contribute his savings to the productive sectors of economy; To help entrepreneurs in successful implementation of projects undertaken by them, by providing risk capital; To earn a sustained stream of returns on successful implementation of the projects; To obtain capital appreciation over a period of time. An investor is interested in true value of the enterprise, unlike speculator, dealer & jobbers who are primarily interested in periodic movement in the market price of securities.

For making investment, investor needs:

 Adequate information to analyze the relative strength of various enterprise; A well regulated intermediary network that facilities easy entry &exit from an investment; Access to information about the regulatory framework and market mechanism Strict monitoring mechanism for immediate checking of errant players; & efficient redressal system for his grievances.

Types of Investors:
The growth in the numbers of investors in India was encouraging. The trends revealed that in addition to FIIs and Institutional Investors, small investors were also gradually beginning to regain the confidence in the capital markets that had been shaken consequent to the stock market scams during the past decade. It is imperative for the healthy growth of the corporate sector that this confidence is maintained. The concept of investor protection has to be looked at from different angles taking into account the requirements of various kinds of investors i.e. (i) investors in equity (ii) large institutional investors (iii) Foreign Investors (iv) Investors in debentures and (v) small investors/deposit holders etc.

1. Individual investor An individual who purchases small amount of securities for him/herself, as opposed to an institutional investor, also called retail investor or small investor. 2. Institutional investor Entity with large amounts to invest, such as investment companies, mutual funds, brokerages, insurance companies, pension funds, investment banks and endowment funds. Institutional investors are covered by fewer protective regulations because it is assumed that they are more knowledgeable and better able to protect themselves. They account for a majority of overall volume.

3. Founder Capital and Love Money investors These sources include money in the bank, certificates of deposit, shares and bonds, cash value in insurance policies, real estate, and home equity and pension funds. Love money investors are your family and friends. If you borrow from relatives and friends, make sure to spell out clearly the terms of the funding agreement (including the date, amount of the loan, interest rate, repayment schedule, collateral, signatures) to avoid future problems and disagreements. How Much They Invest

Generally, the amount of money invested is small. Founder capital and love money are important at the earliest stage of your company or project's development, a stage too risky for most other investors to back.
Angel Investors In general, angel investors are wealthy people, such as retired entrepreneurs and executives, who want not only to invest money but also to contribute their valuable business experience. Others are wealthy professionals, such as doctors or lawyers, who prefer to take a passive role in a business. Angels bring much more than money to your business; they bring experience and know-how. They usually want to play an active role in your business. Their experience can work to your advantage if your management team lacks their kind of expertise. Most angels want to see you invest plenty of your own money to make sure you're really committed. Angel investors are hard to find because they don't advertise their willingness to invest. You'll typically need a referral from a financial advisor or other professional who has established contacts with these individuals. How Much They Invest Typical angel investors will invest between $25,000 to $250,000 in small and medium-sized businesses. Generally they provide equity financing and look for a return on their investment of about 30%. Corporate and Institutional Investors

 Corporate Strategic Investors (e.g. major firms looking for partnerships). Institutional Investors Institutional investors include subsidiaries of commercial banks, investment banks, life insurance companies and pension funds. Canada has a wide range of such organizations including Bank of Montreal Capital, Royal Bank Capital Corporation, CIBC Wood Gundy Capital, Penfund Partners, Investissement Desjardins, Roynat, Ontario Teachers' Pension Fund, OMERS and TD Capital. Government-Backed Corporations Government-backed corporations, such as the Community Futures Development Corporations, often provide equity financing in small communities where there are few mainstream investors. The Atlantic Canada Opportunities Agency supports businesses in the Atlantic Provinces. The Business Development Bank of Canada (BDC), on the other hand, operates across Canada; BDC provides not only financing but also counseling, training and mentoring assistance. Corporate Strategic Investors Corporate strategic investors provide equity to small and medium-sized businesses. They differ from traditional venture capital firms in that their motivation extends beyond immediate financial reasons. Their business agreements are also referred to as "strategic alliances" or "corporate partnerships." Strategic investors have a wide range of objectives: to enhance innovation, to gain exposure to new markets and technologies, to find acquisition candidates, to assure sources of supply, to help a client, to initiate new ventures internally, and to spin off businesses that aren't appropriate for in-house purposes. Conservative investor Their major goal is to preserve their capital. They want to earn some income but because their timeframe to invest is short (2 years), they want to take few risks. Their portfolio is likely to be made up of cash and fixed interest investments with no investments in shares and property. The biggest risk they face is that their investments may not keep pace with inflation.

Moderate investor They want to benefit from holding some growth investments but will only accept an outside chance that their capital could reduce in the short-term. Their investment timeframe is under 5 years. Their portfolio may have 35-40% invested in property and shares. Moderately aggressive investor They are investing for a longer-term (5-10 years) and want to spread their investments over all the asset classes. They want both income and growth and accept that there may be periods where their portfolio goes backwards. In the longer-term they expect to do better than Moderate investors. Their portfolio may have 70-75% invested in property and shares. Aggressive investor They want to focus almost entirely on growth assets and all of their investments will be in shares and property. They accept that in the short-term their portfolio may do worse than cash returns and the capital they have invested may reduce. However, as long-term investors (10 years and longer) they are confident that shares and property will outperform all other asset classes.

Investors Protection:
The basic objectives of regulatory body with body with reference to the investors of the securities are protection of the interest of the investors and education of investors. As far as the first objective and the steps taken by the regulatory body is concerned, there is doubt that in the shortest span the regulatory body has taken important steps to discipline the market intermediaries and other market participants. The steps are taken this regard by regulatory body could not fully protect the interest of the investors of the securities it might be due to the fact that the different authorizes are vested with the statutory powers to regulate different functions aspects of activates relating to the capital market As far as education of investors is concerned, there is no doubt that regulatory body has taken effective steps toward education of investors, making available the activities to the capital market to investing public and also guiding the investors through various investor guidance and active participation by the investors associations. The future programs of regulatory body seem to be encouraging various statutory organizations and the training of the intermediaries to pave the way for adequate investors protections.

Three things need to be done to enhance the investors confidence in the market mechanism and protect his interest: Make investor aware and educated enough to understand technical, regulatory and producural aspects of the investments Make necessary information available to the investor in a manner he understand it, so that he can take informed investment decisions Frame and implement regulations in a Manner that the chances of malpractices and reduced to minimum. Also, the investor should himself also observe the following while investing: o Obtain written documents regarding investing o Read and understand such documents o Find out the costs and benefits associated with the invested o Assess risk-return profile of the investment o Know the liquidity and safety aspects of the investment o Deal only through a sebi registered intermediary o Explore alternative options in case something goes wrong with the investment. Investment choice in the market available to the investors Equity shares o Equity shares are primarily volatile instruments o They yield returns in terms of dividends and equity shares depends upon the trading volume o the share o Companys performance should be monitored closely to track the investors performance o It is possible to buy even a single share in dematerialized mode. Bonds A bond is a loan given by the buyer to the issuer of the instrument. These are dept instruments. Over and above the scheduled interest payments as and when applicable, the holder of a bond is entitled to receive the par face value of the instrument at the specified maturity date.

Debentures

o Debentures are also dept instruments

o Dept instrument are required to be rated by created rating agencies o Investor should track the rating of the same. Mutual funds Professionally managed Provides diversification of portfolio Liquidity Transparency Choice of securities Regulated by SEBI. Evaluation of Investment Choice: An investor should keep in mind various investment choices available to him along with the risk and returns associated with each one of them and evaluate the securities on the followings criteria: Liquidity Safety Returns Tax savings Whether active involvement of investor is required to manage the investment Minimum amount that can be invested. What factor should investor consider before making investment? The investor should consider following factor before making investment in securities Whether there is a regulatory framework in place in respect of the securities Whether the offer of the security is in compliance with the due process of law Whether the transaction has any counter party risk Whether the security can be liquidated into cash easily Whether the security will generate returns compatible with its risk

 Whether the security fits into your investment portfolio and meets your investment goals. RIGHTS OF INVESTORS: o To receive document regarding your investment o To demand certificate of registration of concerned intermediary o To receive the security corporate benefits i.e. dividends, rights, bonus, interest redemption etc o To participate and vote in general meetings o To receive annual reports etc o To apply for winding up of a company, if need be etc.

Rights of a shareholder as an investor:

As a shareholder in a company one enjoys certain rights which are as follows: To receive share certificates, on allotment or transfer as the case may be, in due time. To receive copies of the abridged annual report, the balance sheet, the profit &loss account and auditors reports. To receive dividends in due time once they are approved in general meetings. To get corporate benefits such as rights and bonus share, once they are approved To apply to the company law board to call or direct the annual general meeting. To inspect the minutes book of the general meetings receive copies thereof To proceed against the company and To receive the residual proceeds.

A debentures holder has the following rights:

To receive interest/redemption in due time To receive a copy of the trust deed on request. To apply for winding up of a company, if it fails to pay its dept To approach the debenture trustee with any grievances.

INVESTORS RESPONSINILITY:
It is important for the investor to understand that if he has so many rights as a shareholder in the company he has also certain responsibility to discharge and they are: To remain informed To be vigilant To participate and vote in general meetings To exercise his rights in his own or as a group To pay/deliver securities as and when called upon to do so.

Safeguard for investors:

These are some of the safeguards that need to adhere to by the investors before trading in the securities market. While selecting the broker /sub broker 1. Deal with only sebi resisted broker /sub-broker after due diligence. Details of list of brokers can be procured from the member list published by the exchange and from the web site www.bseindia.com&wwwnseindia.com Enter into an agreement 1. Fill in a client registration form with broker/sub broker 2. Enter into broker/sub /broker client agreement. This agreement is mandatory for all the investors for registering as a client of a BSE trading member. The client should ensure the following before entering into an agreement: 1. Carefully read to understand the terms and conditions of the agreement, before executing the same on a valid stamp paper of the requisite value.

2. Agreement has to be signed on all the pages by the clients and the member or theyre repressive who has the authority to sign the agreement. Agreement has to be signed by the witnesses by giving their names and addresses.

While transacting 1. Specify to the broker/sub broker, the exchange through which your trade is to be executed and maintained separate account per exchange. 2. Obtain a valid contract note (from broker)/confirmation memo (from sub broker) within 24 hours of the execution of the trade. Contract note is a confirmation of trade done on a particular day for and on behalf of a client in a format prescribed by the exchange. It establishes a legally enforceable relationship between the member and client in respect of settlement of trades executed on the exchange as stated in the contract note. Contract note are made in duplicate, and the member and clients both keep one copy each. The client/s are expected to sign on the duplicate copy of the note for having received the original. 1. Contract note form A contract note issued where member is acting for constituents as brokers and agents 2. Contract note form B contract note issued by members dealing with constituents as principles 3. Contract note form C confirmation memo issued by registered sub brokers acting for clients/constituents as sub brokers. Ensure that the contract note/confirmation memo contains: 1. Sebi registration number of the member /sub broker: 2. Details of trade such as order no., trade no., trade time quantity, price brokerage, settlement number, and details of other levies 3. The trade price should be shown separately from the brokerage charged. The maximum brokerage that can be charged is Rs 0.25 per share/debenture or 2.5% of the contract price share /debenture whichever is higher. This maximum brokerage is inclusive of the brokerage charged by the sub broker (sub-brokerage cannot exceed 1.5% of the trade

value) .any additional charges that the member can charge are service tax @12.5 % as may be applicable) of the brokerage, stamp duty, etc. 4. The brokerage and service tax are required to be indicated separately in the contract note. 5. Signature of authorized representative. Arbitration clause stating that the trade subject to the jurisdiction of Mumbai must be present on the face of the contract note. Ensuring settlement Ensure delivery of securities/payment of money to the broker immediately upon getting the contract note for sale /purchase but in any case, before the prescribed pay in day. The member should pay the money or securities to the investor within 24 hours of the payout. Open Demat account. For delivery of shares from Demat a/c, give the depository participant (DP)delivery out instructions to transfer the same from the beneficiary account to pool account of broker through whom shares and securities have been sold. The following details to be given to the DP: Details of the pool a/c of whom the shares are to be transfer, details of script, quantity etc. as per the requirement of depositories, the delivery out instruction should be given at least 48 hours prior to the cut off time for the prescribed securities pay in. 1. For receiving shares in your Demat a/c, give the depositary participant delivery in instruction to accept shares in beneficiary accounts from the pool account of broker through whom shares have been purchased. 2. If physical deliveries are received check the deliveries as per good/bad delivery guidelines issued by SEBI. 3. Bad delivery cases should be sorted out through exchange machinery immediately 4. The investor should tally the account with the member at least once in 6 months. 5. The investor may verify their trades done on BSE through trade confirmation system at www.bseindia.com if they have a contract note for the concerned trade.

6. All registration of shares for ownership of physical shares should be executed by a valid, duly completed and stamped transfer deed.

Investor Right and Obligations:

Investor Rights The right to get

Investor Obligations The obligation to

The best price Proof of price/brokerage charged Your money/shares on time Shares through auction where delivery is not received

Sign a proper Member-Constituent Agreement

Possess a valid contract or purchase/sale note

Deliver securities with valid documents and proper signatures

Square up amount where delivery not received in auction

Statement of Accounts from trading member The obligation to ensure

The right for redressal against

Fraudulent price Unfair brokerage Delays in receipt of money or shares

To make payment on time To Deliver shares on time To send securities for transfer to the company on time

Investor unfriendly companies

Forwarding all the papers received from the company under objections to the broker on time

Several avenues are available for investment. Dont put all your eggs in the s a m e basket. One has to choose different instruments as per his requirements, savings, and age group. Youngsters can invest little more percentage of his savings in risky equity instruments. The person getting retirement compensation would like to go for safe, steady instrument, giving regular income, cash inflow. The following Table is given showing some of the available instruments along with its pros and cons. Investment Option Liquidity Safety Returns Active Involvement Required? Public Provident Fund Post Office Term Deposits National Savings Bank Fixed Deposits Low Low High High Moderate Moderate No No Good Moderate Low Low Tax Savings Amount Required

Low High

High High High Modeate Modeate High

Moderate Moderate Low

No No No

Good Moderate No Tax Taxable Taxable Moderate

Low Low Low Medium Medium Low

RBI Tax Free Bonds Moderate Company Debentures Company Deposits Public Sector and FI Bonds Debt-oriented Mutual Funds Equity-oriented Mutual Funds High High Low Low Moderate

Moderate Generally No Moderate Generally No Moderate No

Modeate

Moderate

No

Moderate

Low

Low

Volatile

No

Good

Low

Equity Shares

Moderate to High

Low

Volatile

Generally Yes

Long term Low

Medium

Where to Invest?

ROLE AND STATUS OF SUB BROKERS:

The details about brokers and sub-brokers network, status and role in the growth of Capital Market is given. 26,446 total official brokers, corporate brokers, sub- brokers. Thousands of their agents-small sub-brokers, hundreds of branches of corporate brokers and thousands

of internally connected terminals (stations-branches) of big-corporate brokers, and very huge and strong marketing network. It has played very- very important role to take Capital Market to small towns of India. Today 15000 terminals are directly connected with NSE-BSE. It has helped to mobilize and channelise Small Investors savings directly in the Capital Market. Capital Market is a market of faith, i.e. Vishwas. All transactions and trading from old times have always been done over telephones. Even in the present day though the clients receive acknowledgement for every instruction, orders are placed over phone. keeping galas by the brokers, lack of legal documentation and benami sub-brokers were some practices which have been entirely curbed with the passage of time by the strengthening of regulatory system. There were many other discrepancies that crept in the system overhauling completely the relationship of Small Investors and brokers/sub-brokers. Initially some brokers always avoided and protested against any regulatory network to set in. As this would have created checks and balances on their activities reducing their illegal margins, sometimes to nil. First such regulation came in the 1925. Capital Market started in India in 1850, for almost 75 years the brokers kept fighting with the government and legislative bodies to stall any regulations from be promulgated and implemented. As a purely investor friendly measure the regulation of stock- brokers and sub-brokers was ensured through announcement of SEBI (Stock Brokers and Sub-brokers) Rules and Regulations, 1992. As per these regulations it is not only mandatory to register with SEBI as a Stock Broker or Sub-broker to carry out the work of stock-broking, but it is also mandated that only a member of a Stock Exchange can get registered with SEBI thereby fulfilling all the requirements of the Stock Exchanges of which they wish to become a member. These regulations bind and regulate the brokers and their activities right from registration to the completion of the trading activity. EXCHANGE WISE BROKERS REGISTERED WITH SEBI
Stock Exchange Total Brokers 2002-03 Corporate Brokers SubBrokers (No.s) Total Brokers 2003-04 Corporate Brokers SubBrokers (No.s)

Ahmedabad Bangalore BSE Bhubnshwar Calcutta Cochin Coimbatore Delhi Gauhati Hyderabad Inter-Connected Stock Exchange Jaipur Ludhiana Madhya Pradesh Madras Magadh Mangalore NSE OTCEI Pune Saurashtra Kutch UPSE Vadodara

323 245 665 233 987 464 182 374 175 306 630

152 114 468 18 201 75 62 213 5 120 247

6 0 925 0 2 0 0 0 0 0 2

323 242 673 229 980 468 177 373 172 305 633

152 116 479 18 200 82 61 215 5 119 248

141 159 6890 17 142 43 26 460 4 201 2

555 302 188 186 199 116 1,036 883 197 436

19 85 34 71 20 11 918 690 59 85

0 1 0 0 0 0 1105 0 1 0

532 297 179 182 195 105 970 867 197 437

19 85 35 70 22 10 863 675 59 86

34 34 124 3 3 5 4703 32 161 0

518 319 Total 9,519 3,835

103 65 2,042

0 0

514 318 9,368

104 64 3,787

25 82 13,291

Rule Or Regulations For Brokers:

The regulations not only specify and regulate the relation between brokers and clients but also between broker and sub- broker detailing general obligations and defining the scope of authority and responsibility. It also lays down capital adequacy norms for brokers ensuring

financial discipline and smooth operations. These regulations have set out a code of conduct for stock-broker which debars them from indulging in any manipulative, fraudulent or deceptive transactions or follow any other malpractice which is detrimental to the investors interest or which leads to interference with the fair and smoothing functioning of the market. SEBI has quite actively been taking up measures for investors protection and has launched a website totally dedicated to Investor Education and Protection. regulations.All in all, one can conclude that in In a order to further regulate and streamline the system, SEBI has regularly been coming out with new guidelines, Rules and liberalized and globalizes environment and an open economy like that of India it is inevitable and highly essential regulate the Capital Market ensuring investors interests alongside development of Capital Markets bringing it at par with other globalize nations.

STATUS OF INVESTORS GRIEVANCES /REDRESSAL SYSTEM: Investor grievance redressal mechanism in SEBI
Securities and Exchange Board of India (SEBI) has been established with the prime

mandate to protect the interest of investors in securities. It is also mandated to promote the development of, and to regulate the securities market. An investor enjoys investing, if (i) he knows how to invest; (ii) he has full knowledge of the market; (iii) the market is safe and there are no miscreants; and (iv) there are arrangements to redress the grievances. Accordingly, SEBIs investor protection strategy has four elements. First, build the capacity of investors through education and awareness to enable an investor totake informed investment decisions. SEBI endeavours to ensure that the investor learns investing, that is, he obtains and uses information required for investing, evaluates various I investment options to suit his specific goals, ascertains his rights and obligations in a particular investment, deals through registered intermediaries, takes necessary precautions, seeks help if he gets into any problem, etc. Towards this end, SEBI has been organizing investor education and awareness workshops directly, and through investor associations and market participants, and been encouraging market participants to organize similar programmes. It maintains an updated, comprehensive web site for education of investors. It publishes various kinds of cautions through media. It responds to the queries of investors through telephone, e-mails, letters, and in person for those who visit SEBI office. Second, make available every detail relevant for investment in public domain. SEBI has adopted disclosure based regulatory regime. Under this framework, issuers and intermediaries disclose relevant details about themselves, the products, the market and the regulations so that the investor can take informed investment decisions based on such disclosures. SEBI has prescribed and monitors various initial and continuous disclosures. Third, ensure that the market has systems and practices which make transactions safe. SEBI has taken various measures, such as, dematerialization of securities, screen based trading system, T+2 rolling settlement, etc. The dematerialization of securities eliminated a large number of investor grievances emanating from servicing of paper based securities such as bad delivery of shares, delay/non-transfer of shares, etc. This facilitated migration from account period settlement to T+2 rolling settlement which reduced settlement risk substantially.

Fourth, help an investor in problem. SEBI has a comprehensive mechanism to facilitate redressal of investor grievances against intermediaries and listed companies. It follows up with the companies and intermediaries who do not redress investors grievances, by sending reminders to them and having meetings with them. It takes appropriate enforcement actions (adjudication, prosecution proceedings, directions, etc.), as provided under the law where progress in redressal of investor grievances is not satisfactory. It has provided for a comprehensive arbitration mechanism in stock exchanges and depositories for resolution of disputes of the investors with brokers and depository participants. It has instituted investor protection funds at Exchanges to compensate investors where a broker is declared a defaulter. Depository indemnifies investors for loss due to negligence of depository or depository participant. Recently, SEBI has realized a disgorgement of unlawful gain of about Rs.30 crore and so far disbursed about Rs.24 crore among the investors who lost out in the IPO irregularities.

While SEBI has been taking various measures for the investor protection, this memorandum focuses on the investor grievance redressal mechanism available in SEBI, its performance, measures taken in recent years for expediting the redressal of investors grievances, difficulties in the existing system and improvements planned.

Redressal of Investors Grievances

The Office of Investor Assistance and Education (OIAE) acts as the single window interface, interacting with investors seeking assistance of SEBI. Investors can submit grievances either by post or hand delivery at any of the SEBI office or by electronic

mode (web or e-mail). All grievances received by SEBI (excluding those which refer/pertain to investigation) are individually acknowledged with unique number, which facilitates tracking. Dedicated investor helpline telephone numbers (022-26449188 & 26449199) are available for investors seeking general guidance pertaining to securities markets and to provide assistance in filing grievances. Dedicated personnel manning the helpline also guide the investors in filing up the grievance submission forms as well as in determining the appropriate authority for their first recourse. Guidance is also provided to approach the appropriate authority if their grievance is outside the purview of SEBI. Grievances against listed companies: The grievances lodged by investors are taken up with the respective listed company and are continuously monitored. The company is required to respond in prescribed format in the form of Action Taken Report (ATR). Upon the receipt of ATR, the status of grievances is updated. Where the response of the company is insufficient /inadequate, follow up action is initiated. Grievances against stock brokers and depository participants:Grievances pertaining to stock brokers and depository participants are taken up with concerned stock exchange and depository for redressal and monitored by the concerned department through periodic report obtained from them. Grievances against other intermediaries: Grievances pertaining to other intermediaries are taken up with them directly for redressal and are continuously monitored by concerned Department of SEBI. During 2009-10, SEBI received 32,335 grievances from investors and resolved 42,742 grievances as compared to 57,580 grievances received and 75,989 grievances resolved in 200809. As on March 31, 2010 there were 1,60,593 grievances pending for resolution as compared to 1,71,000 unresolved grievances as on March 31, 2009. These include 1,22,713 grievances where appropriate enforcement actions have been initiated.

year

Grievances received
During the cumulative

Grievances redressed
Dring the cumulative

Pending grievances at the end of period

During the cumulative

period

period

period

2007-2008 2008-2009 2009-2010 2010-2011 Up to dec

54933 57580 32335 39615

2616980 2674560 2706895 2746512

31676 75989 42742 38064

2427571 2503560 2546302 2584366

133354 121887 122713 121732

56055 49113 37880 40414

Process of Solving Investors Grievances

BSE has established a full-fledged Investors Services Cell (ISC) to redress Investors grievances. Since its establishment in 1986, the Cell has played a pivotal role in enhancing and maintaining Investors faith and confidence by resolving their grievances either against listed companies or against Members of the Exchange. The services offered by the ISC are as under:

Investors Grievances Against Listed Companies:

ISC forwards the Complaints to the respective company and directs them to solve the matter within 15 days. In spite of the above efforts, if the company fails to resolve the Investors Complaints and the total no. Of pending complaints against the company exceed 25 and if these complaints are pending for more than 45 days, after issue of show cause notice for 7 days the Scrip of the company is suspended from trading till grievances are resolved. ISC also transfers such Scrips to Z category for non-resolution of Investor Complaints. ISC takes many other pro-active measures to resolve the Investors grievance such as: Calling the Company representative to the Exchange to interact with Investors / Members to resolve the complaints.Calling major Registrar & Transfer agent to the Exchange to interact and resolve the grievances of the Investors and Members of the Exchange. Issuing monthly press release listing top 25 companies against whom maximum complaints are pending for resolution. The same is also released on the website of the Exchange. Pursuing Mumbai based companies to depute their representative to the Exchange to take the pending list of complaints & resolve the same immediately.

Investors Grievances Against Members:

The nature of complaints received by the Exchange can be broadly classified into the following categories:

Non-receipt of delivery of shares/ Non removal of objection/Non-receipt of sale proceeds of shares/ Non-receipt of dividend/ Non-receipt of Rights, Bonus shares Disputes regarding Rate Difference Disputes relating to non-settlement of Accounts Miscellaneous Items

The complaints are forwarded to the concerned members to reply /settle the complaints within 7days from the receipt of the letter. If no reply is received or reply received is not satisfactory, the matter is placed before the IGRC (Investors Grievance Redressal Committee) headed by Retd. High court Judge. IGRC is constituted by the Governing Board to resolve the Complaints of non-members against Members through the process of reconciliation. The parties are heard and the matter is tried to be solved amicably or it is referred for Arbitration under the Rules, Bye-laws & Regulations of the Exchange.

ARBITRATION:
The Investors complaints referred by IGRC can be against the (i) active members of the Exchange as well as the (ii) defaulter-members of the Exchange. The process of solving the Investors complaints through the arbitration procedure are as mentioned below:

Arbitration Procedure For the purpose of resolution of grievances between Investors and Member-brokers, the Exchange has constituted an Arbitration Committee with the approval of SEBI. The non-member arbitration panel consists of retired High Court and City Civil Court judges, Chartered Accountants, Company Secretaries, Solicitors and other professionals having in-depth knowledge of the capital market. On receiving the direction for arbitration from the IGRC, the complainant (applicant) files relevant supporting documents for arbitration. A set of the arbitration documents is sent to the other party (respondent) for giving his counter reply.After completion of the formalities, the matter is fixed for hearing before arbitrators. For claims less than Rs.10 lakhs, the applicant has/have to propose the name of three arbitrators and the respondent(s) has/have to consent on the name of one of the arbitrators. In case the respondent(s) does/do not consent on the arbitrator, the exchange appoints the arbitrator to adjudicate the matter. For claims above Rs.10 lakhs, a panel of three arbitrators, one each to be appointed by the applicant(s) and respondent(s) and the presiding arbitrator has to be appointed by the exchange to adjudicate the matter.The date for hearing is fixed and the concerned parties are informed about the date through notices. After hearing both the parties and taking the submissions and the documents on record, the arbitrator(s) close the reference and the award (decision) is given. Appeal If the applicant is not satisfied with the award he can appeal against the same in the Exchange within 15 days of the receipt of the award. The appeal bench of five arbitrators hears the matter and gives the award.However, the aggrieved party has to deposit the awarded amount given by the Arbitral Tribunal with the Exchange unless and until the appeal bench exempts it partly or wholly.If the award is in favor of the applicant, the active member has to abide by the decision. If he fails to abide by the award, the Disciplinary Action Committee (DAC) takes necessary action against him. The award becomes a decree after three months from the date on which it is given and can be executed as a court decree through a competent court of jurisdiction. The same can be challenged only in the High Court of Judicature, Mumbai.

Arbitration Procedure against Defaulter Member of the Exchange

Any complaint against defaulter Members of the Exchange can directly be filed in arbitration. However the same has to be filed within 6 months from the date of declaring the Member as defaulter by the Exchange. The rest of the process is the same as above. An award obtained against a defaulter member is scrutinized by the Defaulters committee (DC), a standing committee constituted by the Exchange, to ascertain their genuineness, etc. The awarded amount or Rs.10 lakh whichever is lower is paid from the Customers Protection Fund (CPF). After the approval of the DC & Trustee of CPF, the amount is distributed to the clients who have obtained the award against defaulter member. Investors or Customers Protection Fund: BSE is the first Exchange to have set up the 'Stock Exchange Customers Protection Fund in the interest of the customer's of the defaulter members of the Exchange. This fund was set up on 10th July 1986 and has been registered with the Charity Commissioner, Government of Maharashtra as a Charitable Fund. BSE is the only Exchange in India, which offers the highest compensation of Rs.10 lakhs in respect of the approved claims of any Investor against the defaulter members of the Exchange.The members at present contribute Rs.1.50 per Rs.10 lakhs of turnover. The Stock Exchange contributes 2.5% of the listing fees collected by it. Also the entire interest earned by the Exchange on 1% security deposit kept by with it by the companies making public / rights issues is credited to the Fund.

Trade Guarantee Fund: In order to introduce a system of guaranteeing settlement of trades and ensure that market equilibrium is maintained in case of payment default by the Members the Trade Guarantee Fund

was constituted and it came into force with effect from May 12, 1997. The main objectives of the fund are as given below: 1. To guarantee settlement of bonafide transactions of members of the Exchange inter se which form part of the Stock Exchange settlement system, so as to ensure timely completion of settlements of contracts and thereby protect the interest of Investors and the Members of the Exchange. 2. To inculcate confidence in the minds of secondary market participants generally and global Investors, particularly to attract larger number of domestic and international players in the capital market. 3. To protect the interest of Investors and to promote the development of and regulation of the secondary market. The Defaulters Committee manages the Fund, which is a standing Committee constituted by the Exchange, the constitution of which is approved by SEBI.

Investor Awareness & Education Program:

Investor Awareness programs are being regularly conducted by BSE to educate the investors and to create awareness among the Investors regarding the working of the capital market and in particular the working of the Stock Exchanges. These programs have been conducted in Gujarat, Kerela, Tamilnadu, Uttar Pradesh, Rajasthan, Punjab, and Haryana and within Maharashtra.The Investor Awareness program covers extensive topics like Instruments of Investment, Portfolio approach, Mutual funds, Tax provisions, Trading, Clearing and Settlement, Rolling Settlement, Investors' Protection Fund, Trade Guarantee Fund, Dematerialization of shares, information on Debt Market, Investors Grievance Redressal system available with SEBI, BSE & Company Law Board, information on Sensex and other Indices, workshops and Information on Derivatives, Futures and Options etc.The Bombay Stock Exchange has also earmarked an amount of Rs.1 crore for assistance to Investor Associations for conducting Investor Awareness and education seminars etc. During the year 2000 2001 an amount of Rs.20 lakhs has been disbursed to the SEBI recognized Investors Association. The Indian governmental authorities have recognized this problem by creating a special fund, known as Investor Education and Protection Fund (IEPF) in the Department (now Ministry) of

Company Affairs. It is a laudable idea. In addition, the SEBI has also launched its Investor Awareness Programme. All these attempts are rather sporadic and do not seem to have made much impact so far. A more systematic approach to investor education is needed. The fast socio-economic changes in India, as in other countries, are increasingly forcing people to provide for their own retirement during their working life. 1.BSE Training Institute Which organizes Investor Education programs periodically on various subjects like comprehensive program on Capital Markets, Fundamental Analysis, Technical Analysis, Derivatives, Index Futures and Options, Debt Market etc. Further, for the Derivatives market BSE also conducts the compulsory BCDE certification for members and their dealers to impart basic minimum knowledge of the derivatives markets. For any enquiries Contact: The Training Institute, 21st Floor, P.J.Tower, Dalal Street, Mumbai- 400 001.

2. BSE's official Website www.bseindia.com Which is the focal point for information dissemination and updates Investors with the latest information on Stock Markets on a daily basis through real time updating of statistical data on Market activity, corporate information and results. Educative articles on various products and processes are also available on the site. Publications: BSE regularly comes out with publications for Investor education on various products and processes like Quick reference guide for Investors.

Introduction And Information About Regulatory System:

Investors feeling small, not able to have access, approach the Grievances Redressal System of the Capital Market. India in post liberalization period has enacted enough laws, made sufficient provisions, given full authority to all regulators. It is SEBI, whom everything

is given by the policy-makers, Parliament, which they were requested, RBI has asked for both, an institution to draft monitoring policy and also regulators for the banks and NBFCs. DCA also wanted both, wanted to become, remain policy-makers, executive and also to have full power, authority as regulators. Now the States enacts law. Now States are also acquiring powers, giving the powers and authorities to the State Home Department, to the Collectorate, to the Revenue Ministry, to the Police, enacting Investors Protection Act to control, regulate and punish the finance scamsters, unorganized schemes, Ek ka Double Schemes. New regulators are entering in the arena. IRDA already established. New regulators for Pension Funds, Commodity exchanges are being mooted. Pension Fund Ordinance issued on 30th December 2004. All small investor feels helpless, hopeless and unsecured. In the following paragraphs of the study the status of Small Investors Grievances Redressal System explained in detail. What is the system? How it can be approached? How they are responding to the Small Investors? The Small Investors Protection is a new phenomenon. The need arises only after and due to the economic liberalization. Urgency felt with the opening of Capital Market. The Small Investors Protection concept is the contribution of Investors associations like IGF, CERC and of the media and journalist like Ms. Sucheta Dalal. PETITION TO THE PARLIAMENT Investors Grievances Forum had file a petition to Parliament on behalf of Small Investors in early 2000. This was the first time the status of Small Investors, the Small Investors Protection system, the status of grievances redressal in India was brought to the notice of the highest policy making body in the country. The petition was presented to the Lok Sabha on 10th March 2000. The Petition itself speaks the status of Small Investors and redressal system in the country. The petitioners Shri Shailesh Ghedia and Shri Bharat Kotecha, both office bearers of IGF had submitted the petition to the Parliament. The text of the petition is: THE PETITION We the undersigned petitioners are office bearers of the registered investors association the regulators, power, authorities, laws are made, enacted to Protect Small Investors, but today the

working in various parts of India. The Securities Exchange Board of India also recognizes us, which is responsible for regulating and protecting the Small Investors in the Capital Market. We are working to protect the Small Investors throughout India. The Capital Market and the number of Small Investors have increased rapidly during the last one decade. The number of Small Investors was only thirty lakhs in the 1960s, & it has gone up to 6.30 crores in the year 2000.Opening up of the Capital Market through privatization, liberalization and globalization encouraged investors to invest in the share bazaar, in equities and people invested the savings of their life with the shares and equities of the various companies. But while opening the Capital Markets, the concerned authorities, including the Government, have not framed the rules to regulate the same. In India there is no machinery to protect the Small Investors. In the last several years several security scams broke out in India, namely: 1. Harshad Mehta Security Scam of 1992-93 2. Non-banking Financial Institutions (NBFCs) Scam 3. Plantation Companies Scam 4. Chain Investment Schemes Scams such as Ek ka Double Schemes or Double your money etc.

Losses Suffered By Small Investors:

It is felt that more than 50,000 crores worth of savings of retired pensioners, women, widows and people of the salaried class were either looted or locked up in these scams. But there has been no action for the recovery of the money. Till today, none of the Small Investors have got a Single paisa back. There has been no action against all these unscrupulous scamsters. Justice delayed is justice denied. We have used all the tools available under a democratic set up, that is, we have approached the State as well as the Central Government, the SEBI, the Reserve Bank of India, the Company Law Board, the Department of Company Affairs and the Securities Exchanges, but nothing happened. We therefore, submit this petition before you and request you to urge upon the Ministry of Finance and the Union Government to take action to protect the interest

of the Small Investors and also to come out with a time-bound action plan. Small Investors are required to submit their grievances, complaints to different agencies, and regulators as explained in the Chart/Table. Law maker have evolved different Regulators for different financial instruments. Complaints about particular financial instrument with correct Regulator, eg. complaint against the broker, sub-broker can be filed with two different agencies, (i) Stock Exchange (ii) SEBI. If the transaction is of secondary market, i.e. sale or purchase of shares from the Stock Exchange, the concerned Stock Exchange is to be approached initially. Stock Exchanges are having Investors Grievances Cell. In case of default by the Broker, investment protection fund is made available to make payment to the Small Investors. Maximum ceiling under Investor Protection Fund of BSE and NSE is Rs.10,00,000/- per Small Investor. Stock Exchanges also have arbitration mechanism. If the differences cannot be settled by the Department in the Department both the concerned aggrieved parties are requested to approach arbitrator. BSE and NSE are having very efficient scientific mechanism of arbitration. One can go in appeal against arbitration decision to the Board of Stock Exchange or has to approach SEBI. Now with the recent December 2004 amendment the Stock Exchanges have been brought under the purview of SAT.

Arbitration Procedure:
STATUS OF INVESTOR GRIEVANCES FOR THE FORTNIGHT APRIL 1 TO APRIL 15, 2005

The grievance letters received by SEBI from investors have been categorised as under: Type I: Type II: Type III: Type IV: Type V: Non-receipt of refund orders/allotment letters etc. Non-receipt of dividend. Non-receipt of share certificates/bonus shares. Non-receipt of debenture certificates/interest on debentures/redemption amount of Non-receipt of right forms/interest on delayed receipt of refund order.

debentures/interest on delayed payment of interest on debentures/redemption amount of debentures.

BREAK-UP OF GRIEVANCES RECEIVED AND REDRESSED DURING THE FORTNIGHT: During the fortnight, SEBI received 1698 grievances against listed companies. In the same period 2948 grievances were reported redressed. These redressed grievances include grievances brought forward from the previous periods.

TYPE I II III IV V TOTAL

GRIEVANCES RECEIVED DURING THIS FORTNIGHT 424 180 455 251 388 1698

GRIEVANCES REDRESSED DURING THIS FORTNIGHT 258 180 242 2241 27 2948

GRIEVANCES HANDLED BY SEBI Small Investors are required to send their complaints, grievances to the particular Regulator. SEBI has power to handle following types of grievances TYPE / CATEGORY I) Issue / offers -

1. Refund Order / Allotment advice 2. Revalidation of refund order 3. Duplicate R/O for correct amount 4. Duplicate R/O for identity 5. Cancelled Stock Invest (S.T.) 6. R/O after details furnished 7. Copy of encashed RO 8. Duplicate RO for correct details 9. Allotment against encashed SI. 10. Duplicate RO. after correction 11. Short refund II) NON-RECEIPT OF DIVIDEND III) SHARES: NON-RECEIPT OF CERTIFICATE IN/ AFTER 1. Exchange of allotment Letter 2. Conversion 3. Splitting 4. Transfer 5. Endorsement 6. Bonus Transmission 7. Consolidation 8. Duplication on submission of Indemnity Bond

iv) MISCELLANEOUS : NON-RECEIPT OF 1. Annual Report 2. Offer of Rights 3. Interest on delayed Refund Payment 4. Registration of change dividend 5. Interest on delayed dividend

6. Non list of securities on stock exchange 7. Any other REDRESSAL OF INVESTOR GRIEVANCES: (I) SECURITIES EXCHANGE BOARD OF INDIA SEBI has established a comprehensive investor grievances redressal mechanism. The Investor Grievances Redressal and Guidance Division of SEBI assists investors who prefer to make complaints to SEBI against listed companies. Each complaint received by SEBI from the investors is acknowledged and a reference number is sent to the complainant. Each complaint is taken up with the company and if the complaint is not resolved within a reasonable time, a periodical follow up is also made with the company. SEBI officers also hold meetings with the company officials to impress upon them their obligation to redress the grievances of investors. Errant companies are warned of stern action for their failure to redress grievances. Recalcitrant companies are referred for prosecution. (II) DEPARTMENT OF COMPANY AFFAIRS The Department of Company Affairs has also set up an Investors Protection Cell, Investor Complaints received in this Cell are processed for action by referring them to the concerned companies for speedy redressal. An acknowledgment is issued and subsequently, action taken as informed by the company is also communicated Department 1.4.2000 to has reportedly 31.12.2000 processed out of 7834 complaints which, 7343 to the complainant. The during the period from were satisfactorily

complaints

redressed. During the period 1.4.2000 to 31.12.2000, prosecution against 90 companies were ordered by Investors Protection Cell. (III) STOCK EXCHANGES The data regarding receipt and disposal of investor grievances in respect of years as presented by BSE and as observed from the fact book of NSE are shown below Bombay Stock Exchange Ltd. resolved 1060 Investors complaints against companies during the month of JANUARY 2006.

During the month, BSE Ltd. received 560 complaints against 359 listed companies. In the same period 1060 complaints were resolved against 533 listed companies. These resolved complaints include complaints brought forward from the previous periods. TYPE OF COMPLAINTS COMPLAINTS RECEIVED COMPLAINTS RESOLVED
Active I II III IV V TOTAL 60 97 141 105 77 480 Suspended 0 0 1 79 0 80 Total 60 97 142 184 77 560 Active 50 86 122 197 66 521 Suspended 1 9 94 433 2 539 Total 51 95 216 630 68 1060

The complaints received by BSE Ltd. from investors have been categorized as under: Type I: Non-receipt of refund orders/allotment letters/stock invests. Type II: Non-receipt of dividend/interest Type III: Non-receipt of share/debenture certificates after transfer/ endorsement/conversion and bonus shares. Type IV: Non-receipt of Annual Reports, right forms/interest on delayed receipt of refund order/dividend, etc.

Chapter -2 LITERATURE SURVEY

LITERATURE SURVEY
Various surveys have been undertaken by various agencies, institutions during last twenty years. In 1999/2000 SEBI has also undertaken, supported a survey to understand the nature of investment, concept of investment, psychology of Investors in India. Institutions like, Society for Capital Market Research and Development, Delhi, are conducting the survey regularly. NGOs / Investors Associations also undertake survey to explain status of Small Investors, Small Investors Protections System. Three different Surveys are given to understand psychology, status of Small Investors and that

of Indian Capital Market. Survey of Indian Investors conducted by Securities and Exchange Board of India (SEBI) & National Council of Applied Economic Research (NCAER) 1999/2000 Survey regarding Problems of Small Investors and Measures to safeguard their Plights -2003 (Research Study Sponsored by: IEPF, Department of Company Affairs, Ministry of Finance, Government Of India), Research Report prepared by Prof. Sri Ram Khanna with Paramjeet Singh, Vanita Tripathi the (Voluntary Organization in the Interest of Consumer Education) VOICE Research Team, New Delhi. Survey of Indian Share Owners 1991, by Society for Capital Market Research and Development, Delhi. Survey of Indian Investors conducted by Securities and Exchange Board of India (SEBI) & National Council of Applied Economic Research (NCAER) First time a major survey was undertaken to understand the status of Small Investors and Capital Market in India. A massive Survey conducted by National Council of Applied Economic Research on behalf of SEBI was undertaken in the year 1999-2000. It s report says: The Indian securities market has undergone a substantial and speedy change in the last few years. Indeed its present form and content hardly bears any resemblance with its earlier state. And for the investor population, no recent estimate has been available for want of a detailed scientific enumeration. This has handicapped SEBI, market intermediaries, researchers and investors in deciding their policies and investment choices respectively. To overcome this problem SEBI requested the National Council of Applied Economic Research (NCAER) and agency known for its expertise and experience in conducting objective and large scale household surveys, to undertake a survey of the Indian investors. Primary objective of survey was to have a demographic profile of investors and investor households investing both directly and indirectly. This was expanded also to find out the investment preferences, perceptions about risks in investments, level of awareness and experience of investors while investing in the Indian securities market and the reasons which inhibit some household from investing in the securities market. Survey regarding Problems of Small Investors and Measures to Safeguard their Plights - 2003

(Research Study Sponsored by: Department of Company Affairs, Ministry of Finance, Govt. of India), Research Report prepared by Prof. Sri Ram Khanna with Paramjeet Singh, Vanita Tripathi and the (Voluntary Organization in the Interest of Consumer Education) VOICE Research Team, New Delhi. DR. N.L. MITRA COMMITTEE ON SMALL INVESTORS PROTECTION The Committee touched the subject of various regulators and the Grievances Redressal System. As stated earlier about the petition filed by Investors Grievances Forum on the Small Investors Redressal System Status the Government, MOF, SEBI appointed a Committee to look into the status and suggested the measures about the Grievances Redressal System and measures for Small Investors Protection. Dr. N.L. Mitra of the Central for Business Law Studies, Bangalore was appointed as Chairman of the Committee. Dr. Mitra Committee submitted its report on 17th April, 2001. In its report the Committee felt need for a separate Act for Investor Protection. Dr. N.L. Mitra report has observed that the provision regarding protection of investors interest is spread over various Acts. Investment in securities is covered by the Securities Contract (Regulation) Act and the Securities and Exchange Board of India. If securities are related to incorporated companies then the Companies Act is involved. The Act also envisages appointment of Special Courts. The Committee also suggested forming an Agency for providing compensation.

The problem of investors protection arises due to following factors: (i) Persons or entities raising funds for specific purposes but not applying the fund for that specific purpose or applying the fund for different purposes without the consent of the people supplying the fund either negligently or intentionally (ii) (iii) Raising the fund knowingly that the fund shall not be used for the purpose of which it was raised and shall be diverted Raising public funds by cheating or committing breach of trust.

SMALL INVESTOR PROTECTION BY KIRITSOMAIYA Various suggestions, public debates are going on to strengthen and simplify the redressal system. The consumer forum provides an expeditious remedy to who has suffered loss on account of deficiency in goods / services purchased by him. A similar arrangement is called for redressal of investor grievances, given the rate of disposal of our judicial system. The investor forum as well as other authorities should have power to dispose of the cases summarily and to award compensation to the investor. It is not enough if the culprit is punished. The culprit needs to be punished in an exemplary manner, while investor should have means to recover his loss caused by the culprit. Suggestions to compensate the financial losses of Small Investors are being discussed and demanded by the Investors Associations. The depositors are protected upto Rs.1 lakh in the event of liquidation / bankruptcy of a bank. This protects innocent depositors and thereby contributes to the stability of the financial system. A similar mechanism may be developed to compensate an investor upto Rs.5 lakh if he suffers a loss on account of the failure of the system or mischief by any market participant. Investors Activists-Authorities & Redressal System by Sucheta Dalal Financial Journalist cum activists like Sucheta Dalal is consistently suggesting Centrally Available Information System Redressal System and Avenues is made available to the Small Investors. NSE has also expressed their opinion in favour of such Central Information Depository System. An investor normally deals in securities through an intermediary, whose acts of omission and commission can cause loss to him. In order for the investor to choose the right intermediary through whom he may transact business, it may be useful to help him in taking informed decision by making details of intermediaries available to him. The details may include the form of organization, management, capital adequacy, liabilities defaults and penal actions taken by the regulator and self-regulatory organization against the intermediary in the past other relevant information. Similarly the details about the issue should be available to the investors. Investors Associations and activists have made several suggestions regarding the Grievances Redressal System and Regulatory System. Shri A.K. Narayan committee on Tamilnadu Investors Association

As far as the Grievances Redressal System is concerned it is really in shambles. Hardly anybody wants to take the responsibility to solve the investors complaints. They are made to run from pillar to post and also made to spend money though they get nothing in return. There are too many market Regulators, namely RBI, SEBI/DCA and so on. We dont understand the need to have different regulators to solve investors problems. So my suggestion is that there should be a body like SEBI, who will be in a position to solve all the investors grievances / problems. There should be a standard committee in SEBI comprising of SEBI/RBI / DCA to look into investors complaints every month. Role of NGOs in Investors education Many problems relating to investors, particularly, small investors can be tackled by educating the investors. Small investors should be encouraged to either invest through Mutual Fund mechanisms, or should take investment decisions only after getting adequate information about risks and rewards. The investors should also be encouraged to participate in the proceedings at general meetings (either physically or through postal ballot, including by electronic media) in a constructive manner. This requires improving the general awareness of the investors through informal mechanisms. The help of various NGOs engaged in investor protection activities should also be taken for this purpose. The Committee perceives a positive role for Investors Associations / NGOs in this regard which should be supported by both the Government as well as corporate entities.

Article by Suchetadalal. The judiciary will have to help the investors cause - (5 November 2000) Such funding is imperative for building up investor associations particularly in smaller towns such as Jodhpur, Hyderabad, Kanpur, Coimbatore, Chennai, Jaipur and Patan. But nine recognized associations couldnt begin to address investors needs. If India has 23 stock exchanges, it stands to logic that there should be at least as many strong investor associations in the country. Instead, Mumbai which headquarters four stock exchanges (BSE, NSE, OTCEI and

the Integrated Stock Exchanges of India) has one politically backed association, which derives most of its clout from its main promoter:- Bharatiya Janata Party MP, Kirit Somiaya.The problem is that investor groups need seed money to commence their activities, establish a record of accomplishment and to achieve the minimum acceptable membership. It is only then that they are eligible for accreditation and monetary grants. The problem is that investors are unwilling to join investor groups because most of them have a pathetic track record. Until recently, SEBI also treated Investor associations as a necessary evil, rarely consulted them and refused to allow them more than a token role in the process of framing regulation.There is a similar problem with the way the judicial system functions and perceives investor issues. Not only is litigation a slow and expensive process, but even in the few cases where courts have ruled in favor of investors (including consumer courts) the relief and costs granted to them are so niggardly those they only acts as a deterrent to investor litigation. The Department of Company Affairs committee The corporate world has also responded in a positive and pro-active manner. Policy reform has been the main focus of the Department ever since the Government took the road of liberalization and globalization. The Department is engaged in the exciting task of making the Indian companies to excel in a globally competitive market, create wealth for the shareholders and to the nation by creating an investor friendly environment. A Committee has been set up to propose a modern competition law in the light of international economic developments and the need to promote competition, relating to competition law including law relating to mergers and de-mergers. The Committee consists of experts and is headed by Shri S.V.S. Raghavan. The Committee would inter-alia recommend suitable legislative framework, changes relating to legal provisions in regard to promotion of competition, trade practices as well as appropriate administrative measures. Similarly a Committee to draft legislation for formation and conversion of cooperative business into companies has been set up under the Chairmanship of Dr. Y.K. Alagh. The Committee would examine the feasibility of framing a legislation, which would enable incorporation of cooperatives as companies and help conversion of existing cooperatives into corporate entities and provide necessary legal framework. The Committee will give its report shortly.

SIPC/INVESTOR PROTECTION TRUST SURVEY Two of the few "bright spots" in the survey findings had to do with account statements and diversification. In responding to a key behavior question, nine in 10 investors said that they regularly review their brokerage account and/or mutual fund statements. A number of organizations -- including SIPC -- have placed a major emphasis on the need for investors to protect themselves by reviewing brokerage account statements in detail. On the knowledge side of the survey, nearly three out of four investors (74 percent) showed that they understand the concept of diversification, which has been a major focus of investor education efforts by the Investor Protection Trust and other groups. SIPC President Stephen Harbeck said: We are encouraged that people understand the need to go over their account statements carefully to make sure that everything is in order. But these findings indicate just how big a job remains in front of organizations such as SIPC that are committed to investor education. When four out of five Americans mistakenly think that there is an agency out there somewhere that insures them against investment fraud losses, we obviously have our work cut out for us. Survey conducted by Secretary of State Todd Rokita for Investor Basic Training It's a time-tested truth that education is the key to success in nearly all areas of lifeincluding investing. Consumers that make informed investment choices are significantly less likely to fall victim to fraud, and in turn, less likely to lose their money in unsound investments. Unfortunately, a statewide survey conducted by Secretary of State Todd Rokita shows that nearly two-thirds of Indiana adults who own financial investments have little or no knowledge about potential fraud schemes or the security of such investments. To help combat this problem, we have included some helpful information and valuable resources for current investors and Hoosiers who may be considering investing in the future.
Indian Household Investors Survey -2004

The Investor Education and Protection Fund constituted u/s 205C of the Companies Act has been engaged in the education of investors in India. Various activities have been undertaken by the IEPF. Prof L.C. Gupta, former member SEBI conducted a survey of Indian households Investment Preferences, which probably sets the record straight on several issues. He found that the number of investors in India is stagnating since 1997 and that just about 18 per cent of the

investor population thinks that the Indian stock market is a good place for long-term investment. Also, investors say that reforms have made the secondary market safer but the new issue market is much riskierthis is the exact reverse of their perception a decade ago. The IPO market is in the doldrums since 1996 except for the IT bubble of 1999-2000. In order to understand the behavior of small investors in India, a Survey was conducted under the aegis of the IEPF. JPC Report On Serious Flaw in the Report The JPC report however suffers from a very serious weakness. This weakness pertains to the failure to establish the contribution of the nexus between brokers, bankers and most importantly corporate entities. Not that the JPC was unaware of this serious lacuna in their findings. It states candidly - "This Committee holds that even as there are valid reasons to believe that the corporate house-broker-bank-FII nexus played havoc in the Indian capital market through fraudulent manipulations of prices at the cost of the small investors, this Committee were severely handicapped in the matter of making any purposeful recommendations because of nonavailability of required support from concerned regulatory and other bodies with necessary material. This issue acquires added importance in view of the recommendations of the 1992 JPC regarding the urgent need to go into this unhealthy nexus of corporate entities-brokers-banks and others". So far as the enquiry by the regulators, the Committee had to make good with the manner in which these regulatory bodies were conducting their enquiries. This has been noted with anguish by the Committee - "SEBI furnished four sets of interim reports inclusive of its investigation regarding scrips of certain corporate bodies. The Committee's insistence for SEBI's final findings regarding the role of promoters/corporate bodies in the price manipulation of the scripts yielded yet another set of reports most of which were again of interim nature and were received as late as in November 2002. Due to non-availability of final report from SEBI, the Committee could not have the opportunity to take oral corporate bodies".

Main Committee Apex Committee There is a Committee (Commonly referred to as Main Committee or Apex Committee) to administer the IEPF. Pursuant to Section 205C(4) read with Rule 7 of the IEPF Rules 2001, the Central Government has constituted a Committee vide SO No. 125(E) dated 28-1-2004.

Secretary, Department of Company Affairs are Chairman of the Committee. The members are representatives of Reserve Bank of India, Securities Exchange Board of India, and experts from the field of investors? The Committee shall recommend the following activities relating to investors? Education, awareness and protection: (a) Education Programmes through Media; (b) Organizing Seminars and Symposia; (c) Proposals for registration of Voluntary Associations or Institution or other Organizations engaged in Investor Education and Protection activities; (d) Proposals for projects for Investors? Education and Protection including research activities and proposals for financing such projects; (e) Coordinating with institutions engaged in Investor Education, awareness and protection activities; The Committee may also be entrusted with such other functions for carrying out the objects for which the Fund has been established.

Investor Protection and Equity Markets by Andrei Shleifer and Daniel Wolfenson In this research a simple model of an entrepreneur going public in an environment with poor legal protection of outside shareholders. The model incorporates elements of Beckers (1968) crime and punishment framework into a corporate finance environment of Jensen and Meckling (1976). He examines the entrepreneurs decision and the market equilibrium. The model is consistent with a number of empirical regularities concerning the relationship between investor protection and corporate finance. Recent research reveals that a number of important differences of financial systems among countries are shaped by the extent of legal protection of outside investors from expropriation by the controlling shareholders or managers.

Corporate Governance, Investor Protection, and Performance In Emerging Markets by Leora F. Klapper

Recent research studying the link between law, and finance has concentrated on countrylevel investor protection measures, and focused on differences in legal systems across countries, and legal families. The authors extend this literature, and provide a study of firm-level corporate governance practices across emerging markets, and a greater understanding of the environments under which corporate governance matters more. Their empirical tests show that better corporate governance is highly correlated with better operating performance, and market valuation. More important, the authors provide evidence showing that firm-level corporate governance provisions matter more in countries with weak legal environments. These results suggest that firms can partially compensate for ineffective laws, and enforcement by establishing good governance, and providing credible investor protection. It also Show that firm-level governance, and performance is lower in countries with weak legal environments, suggesting that improving the legal system should remain a priority for policymakers

Investor protection and demand for equity by Stockholm School of Economics

This paper develops a simple equilibrium model showing that investor protection has an impact on stock market development also through the demand for equity. A joint rationale is provided for the lower returns of weak corporate governance stocks and investors' portfolio decisions. In this model, investor protection affects how a firm's cash flows are divided between security benefits, which accrue to all shareholders pro-rata, and private benefits, which only the controlling shareholders have access to. This division in turn affects the prices that different classes of investors are willing to pay for their stocks.

Modern tech should aid in protecting investors by FICCI

The Federation of Indian Chambers of Commerce and Industry (FICCI) and the Society of Indian Law Firms (SILF) Research Paper on securities market regulations has suggested wide-ranging measures to streamline the operation of the SEBI Act, regulations on buy-back of shares, takeover code, insider trading, public deposits and the role, responsibility and accountability of independent directors. These issues assume importance in the light of developments taking place in the capital market. The study shows that the Indian capital markets have witnessed significant reforms on the structural, operational and regulatory front over a period of time and made Indian markets comparable to many developed and emerging markets.

Some of the findings and suggestions of the paper are:

On the question of public deposits it argues, defaults should not be cognizable offence as these are by very nature unsecured, are driven by risk and reward tradeoffs and points out that fraud, irrespective of profit or loss, should be punished.

SEBI and ministry of company affairs should make a distinction in terms of defaults. For investors protection, the use of modern technology, Internet, computers should be enabled to enhance the efficiency of the disclosure process.

CHAPTER -3 RESEARCH METHODOLOGY

OBJECTIVES OF THE STUDY:

To study the SEBI guidelines for Retailer investor. To determine the role of stock exchange for investor protection. To analyze the shortcomings of the stock exchange regarding investor protection. To assess the satisfaction level of investor regarding investor protection. To evaluate the role of the broker with regard to SEBI guidelines for investor protection.

SCOPE OF THE STUDY:

Investors are backbone of the capital market. Mobilizing savings from the small investors, channelizing the same into the capital market and making it available for industrial development can help to have better economic growth. Developed countries of the world have used this route for achieving the economic growth. The study may prove useful in the future because of the following:

Expand the body of knowledge and/or provide practical materials that will have a positive impact on investor education or protection Research methods to improve disclosure to investors about investments and financial services Encourage investors to check the background of financial professionals prior to doing business with them Empower the nation's young people that are about to enter the workforce to better prepare for retirement and to meet other financial goals

NEED OF THE STUDY:

Investors are backbone of the capital market. Mobilizing savings from the small investors, channelizing the same into the capital market and making it available for industrial development can help to have better economic growth. Developed countries of the world have used this route for achieving the economic growth. India being a developing country accepted this route. Importance to the small investors got momentum after the economic liberalization of 1991.Though the market capitalization in the capital market went up from Rs.54, 000 Crores in 1990 to almost Rs.15, 00, 000 Crores in 21st Century, a series of scams during the same period caused concern to small investors, regulators and policy makers. Investors need to understand that the agency would investigate complaints from a regulatory perspective only and there can be no assurances that formal charges will be filed against the broker.

RESEARCH DESIGN OF THE STUDY:

This research work is based on various data, charts, tablets, and survey. Primary and secondary data have been collected from various sources. Primary data was collected through sample survey. A questionnaire containing various aspects of savings, attitude, income level, habits of investors were covered. This data belongs to Ludhiana. Investment in small savings, fixed deposits, debentures, company deposits, bank exchange, investment in Mutual Funds are covered. The depth of investors education, awareness among them, importance and status. Help and support for filling the questionnaire, guidance from experts being obtained. The present study is descriptive study based on various data, opinion, collected, gathered from various books published on capital market, debates of parliament, annual reports-journals, publications of RBI, SEBI, Government and others. Primary data have been collected through the field survey conducted in Ludhiana. The Agencies, business magazines, business newspapers deposits, equity share application, equity share purchase from secondary market i.e. from stock

data about grievances of small investors were collected from the Investor Grievances Forum. Views of experts, authorities have been gathered, collected, noted through the personal interaction and interviews taken during the last quarter of 2005.

DATA COLLECTION:
Primary Data. Secondary Data.

Sources of primary data 1) Questionnaire. Sources of secondary data 1. Annual report 2. Journals 3. Websites 4. Books

Sampling procedure: Our sampling procedure was designed to overcome the problem due to widespread reluctance to disclose personal income and investments. Our method of sampling is good enough to give a feel of the entire system by covering the main stream of investors. Admittedly, the sample does not represent the countrys entire population but only the universe of potential investors. Those below the poverty line or having little voluntary savings for financial investments or no ability to understand investments, like shares and bonds, had to be excluded, because they were irrelevant for the purpose of the present survey.

Chapter- 4 ANALYSIS, INTERPRETATION & FINDINGS

ANALYSIS & INTERPRETATION:

Analysis of data: Percentage of total investors income wise and age wise: Sample composition by investor income

S. No

Monthly Income (Rs.)

No of respondents

Percent%

Upto 10000

40

26.86

10,001-15000

35

22.88

15001-20000

28

18.75

4 20001-25000 5 Over 25000 Total

18

12.34

29

19.17

150

100.00

SAMPLE COMPOSITION BY AGE OF HOUSEHOLD HEAD

S. No.

Age Groups (Years)

No. Of Respondents

Percent

1 2 3 4 5 6 7 8 9

Upto 25 26-30 31-40 41-50 51-60 61-65 66-70 71 and above Not answered Total

5 19 42 43 25 7 4 3 2 150

6.62 12.12 27.84 28.13 16.16 4.65 2.29 1.69 0.49 100.00

Types of investor and Transacting in the stock exchange As we know the there are mainly two types of investors, an individual who purchases small amounts of securities for him/herself, as opposed to an institutional investor. Also called retail

investor or small investor. Entity with large amounts to invest, such as investment companies, mutual funds, brokerages, insurance companies, pension funds, investment banks and endowment funds.
Types of investor and Transacting in the stock exchange

Options

No of r e s p o n d e n t s

Institutio n a l

Retailer

Less than 1 year Less than 3 years Less than 5 years More than 5 years Total

25 85 32 8 150

1 3 2 4 10

24 82 30 4 140

Types of investors and transaction in the stock exchange

100 50 0 1 24 Less than 1 year 3 82 2 30 4 4
Institutional Retailer

Less than 3 Less than 5 years years option

More than 5 years

INTERPRETATION:
The above data shows that 24 retailer investors and 1 institutional investor are transacting in the market to less than 1 year, 82 retailer investors and 3 institutional investor are transacting in the market to less than 3 year, 30 retailer investors and 2 institutional investors are transacting in the market to less than 5 year, 4 retailer investors and 4 institutional investors are transacting in the market to more than 5 year in the market.

Aware About Demat

Demat account are compulsory for the trading. Without demat account investors are not able for trading.

t d p s e r f o n

Aware about demat

Investors

Percent

YES NO Total

130 20 150

86.66% 13.33% 100%

Aware about Demat

100.00% 50.00% 0.00% YES NO 86.66%

13.33%

INTERPRETATION: The above data shows that 86.66% investors are aware about demat account and 13.33% investors are not aware about the demat account. The Nature Of Investment and when you do trading

The Nature Of Investment and When you do trading Option Occasionally

Investo

t d n p s e r f o %

Frequentl y

Long term Medium term Short term Day trader Total

20 40 60 30 150

8 10 20 12 50

12 30 40 18 100

INTERPRETATION: The above data shows that 8 investors are trading in occasionally, 12 investors are trading frequently and nature of investment is long term, 10 investors are trading in occasionally, 30 investors are trading frequently and nature of investment is medium term, 20 investors are trading in occasionally, 40 investors are trading frequently and nature of investment is short term 12 investors are trading in occasionally, 18 investors are trading frequently and nature of investment is day trader. Results: Youngsters can invest little more percentage of his savings in risky equity instruments. The person getting retirement compensation would like to go for safe, steady instrument, giving regular income, cash inflow. Which Securities Trade Frequently By Investors

Securities trade frequently by investors Types of Securities

No of respondents

Percent

Equity Bonds Debentures

100 20 20

66.66 13.33 13.33

Future and Options Total

10 150

6.66 100%

INTERPRETATION: The above data shows that 66.66% investors are investment in the equity, 13.33% investors are investment in the bonds, 13.33% investors are investment in the debentures and 6.66% investors are investment in derivatives. Lost money in the past by investing

Lost money in the past by investing

No of Investors Mutual Funds Nationalized or Private Bank Deposits Company Deposits Shares 20 30

Percent

20 0

0 13.33

Derivatives No Total 100 150

0 66.66 100%

INTERPRETATION: The above data shows that 20% investors are lost his money in the mutual funds, 13.33% investor are lost his in the equity, 66.66% investors are says that they have no face any problems regarding securities. Listed Companies Shares, which you own, are listed on

Listed Companies Shares

No Of Investors
NSE BSE Other exchange

Percent

50 40 60

33.33% 26.66% 40%

Total

150

100%

LISTED COMPANY SHARES

60.00% 40.00% 20.00% 0.00% 33.33% 40%

26.66%

INTERPRETATION: The above data shows that 33.33% investors are Listed His Shares in NSE, 26.66% investors are listed his shares in the BSE, 40% investors are listed his shares in other stock exchanges.

Aware about investor grievances cell of NSE, BSE & LSE

N I F O % R T S E V

NSE

BSE

Other exchange

Aware about investor grievances cell of NSE, BSE & LSE

No of respondents Yes No Can Not Say 80 40 30

Percent

53.33 26.66 20

Total

150

100%

Investor Grievances Cell

60 40 20 53.33 26.66 20

r t s e v n i f o %

0 Yes No Can Not Say

INTERPRETATION: The above data shows that 53.33% investors are know about the investor grievances fund, 13.33% investor are lost his in the equity, 66.66% investors are says that they have no face any problems regarding securities.

Know about investor protection fund of stock exchanges The Government has established an Investor Education and Protection Fund (IEPF) under Sec. 205 C of the Companies Act, 1956 under which unclaimed funds on account of dividends, matured deposits, matured debentures, share application money etc. are transferred through the IEPF to the Government by the company on completion of seven years. No of respondents Yes No Can Not Say 100 40 10

Percent

66.66 26.66 6.66

Total

150

100%

INTERPRETATION: The above data shows that 66.66% investors are know about the investor protection fund, 26.66% investor are not know about protection fund.

Grievance mechanism adopted by stock exchange to resolve complaints adequate No of respondents Yes No Can Not Say Total 90 40 20 150

Percent

60% 26.66% 13.33% 100%

Grievance Mechanism adopted by Stock Exchange

100% 50% 0% 60% 26.66% No

13.33% Can Not Say

INTERPRETATION: The above data shows that 60% investors are think that grievance mechanism adopted by stock exchange to resolve their complaints adequate and 26.66% investors are think that their complaints are not adequate

Like to attend the workshops/seminars if organized

r t s e v n i f o %

Yes

Investors
Percent

Yes No Can Not Say Total

140 10 0 150

93.33 6.66 0 100%

INTERPRETATION: The above data shows that 93.33% investors are like to attend the seminar but 6.66 % investors are not interested to attend the seminars.

Media prefer the most for investor education

NO OF RESPONDENDS TV Newspapers Seminars Magazines At the stock exchange ALL Total 12 24 18 25 32 39 150

Percent

8%
16%

12% 16.66% 21.33% 26% 100%

INTERPRETATION: The above data shows that 8% investors are prefer the most Tv media, 16% investors are prefer the most newspapers media, 12% investors are prefer the most seminars media, 16.66% investors are prefer the most magazines media, 21.33% investors are prefer the most stock exchanges media, 26. % Investors are prefer all the media.

Role of broker in investor protection

Investors
Percent

Important Not important Can Not Say Total

130 20 0 150

86.66 13.33 0 100%

INTERPRETATION: The above data shows that 86.66% investors are think about that role of brokers are very important for the investor protection but 13.33% investors are think role of broker are not important for investor protection. The best solution to protect investors rights NO OF Investors

Percent

% Brokers and securities intermediaries should be more honest Wrongdoers should be severely and swiftly punished 23 15.33% 37 24.66%

Increase regulation

28

18.66%

Improve management of and internal controls in companies

26

17.33%

Educate investors more effectively

36

24%

Total

150

100%

INTERPRETATION: The above data shows that 24.66% investors are think about that best solution to protect investors right are brokers and securities intermediaries should be more honest, 15.33% investor are think wrongdoers should be severely and swiftly punished, 18.66% investors are think about that increase regulations, 17.33% of investor are think that improve management of and internal controls in companies and 24% investors are think about that educate investors more effectively.

FINDINGS OF THE STUDY

A significant finding of this study is that, contrary to popular belief; a majority of investors in the stock market are long-term oriented investors rather than short-term speculators. This is clearly indicated by our examination of the investment strategies being followed at the individual investor-level. This is a very healthy feature and should be encouraged by the policymakers and regulators.

The study draws attention to the emerging phenomenon of what we call maturing of retail investors in India. The bulk of the present generation of Indian retail investors got their exposure to the vicissitudes of the equity market during the last 15 years, specially the 1990s.

Chapter -5 LIMITATIONS & SUGGESTIONS

LIMITATIONS OF THE STUDY

Although the survey has been conducted very carefully but some points remain in every survey. It is also happen with me. These points remain due to some reasons that reasons are as follows: Most of investors are filled the questionnaire very quickly. Some of investors are refuse to participate in the survey. Most of the investors are conservative and precise in their replies.

SUGGESTIONS OF STUDY
Regulators have always talked about investors and made new commitments every time to Major Banks, intermediaries, brokers

protect them, forgetting the earlier ones. tune. The Media has always remained helpful

industrialists; business associations, mutual funds and corporate have sung the same towards creating awareness among the

investors. Surprisingly, scams still take place. Investors have either lost or locked up more than Rs.50000 crore in various scams of the first ten years of liberalization i.e. 19912001. What is missing is the lack of commitment.

 From investor protection viewpoint, we need to progress towards a more positive approach than mere crisis prevention. The aim should be to ensure greater orderliness in the working of the stock market and to assure all investors at all times that they shall get a fair deal and shall be protected against malpractices Our analysis suggests that measures adopted often tend to be inadequate, especially because no long-term view is taken or the attempt is simply to prevent an immediate market crisis. Averting a crisis is, of course, important but market crisis is an extreme event. It is rare in well-developed markets but was recurrent in India and made the Indian market notorious.

Chapter- 5 BIBLIOGRAPHY

BIBLIOGRAPHY
1. Survey regarding Problems of Small Investors and Measures to Safeguard their Plights 2003, Voluntary Organization in the Interest of Consumer Education, New Delhi. 2. http://www.hinduonnet.com/businessline/iw/2001/06/24/stories/0724g05y.htm 3. Http--www.kiritsomaiya.com-PHDthesis-KIRIT SOMAIYA PH.D. VOLUME ONE.pdf 4. http://www.suchetadalal.com/articles/display/26/466.article 5. http://www.dca.nic.in/report/ar/ar99-2k.htm 6. .http://www.sipc.org/media/release13Dec05.cfm 7. http://www.in.gov/sos/securities/investmentwatch/basic_training.html 8. .http://www.mca.gov.in/MinistryWebsite/dca/report/household/householdm.html 9. .http://pd.cpim.org/2003/0126/12262003_jpc-2.htm 10. http://www.mca.gov.in/MinistryWebsite/dca/investors/iepf.html 11. http://post.economics.harvard.edu/hier/2000papers/HIER1906.pdf 12. .http://econ.worldbank.org/external/default/main? pagePK=64165259&piPK=64165421&menuPK=64166093&theSitePK=469372&entityID= 000094946_02041804272577 13. http://jobfunctions.bnet.com/abstract.aspx?promo=50002&docid=167621

14. . http://www.ficci.com/news/viewnews1.asp? News_id=279

15. Article On, Investors Make A Beeline To Dalal Street, Business standard 12th July 2005 page no 8.

16. A quick reference guide for investors-issued by Sebi 17. George Cole Scott, Investing In Close Ended Funds, finding value and building wealth, New York, New York institute of finance, 1991 18. .http://www.galbithink.org/topics/ka/itypes.htm 19. https://www.nscu.com/Personal/ProductsAndServices/Investments/FinancialWellnessPlannin g/TypesofInvestors/ 20. http://www.ventureworthy.com/ 21. Prasanna Chandra,Investment Analysis And Portfolio Management, part 7, Guidelines For Investors Decision, published by Tata McGraw-hill publication company ltd, New Delhi 2005,page no.622 22. . https://www.nscu.com/Personal/ProductsAndServices/Investments/FinancialWellnessPlannin g/TypesofInvestors/ 23. .http://indiabudget.nic.in/es2001-02/chapt2002/chap43.pdf 24. G.S Batra,Globalisation Of Financial Markets , Recent trends in financial markets: performance and policy perspective Investors Protection, Deep &Deep Publications Pvt Ltd., page no 53 25. A quick reference guide for investors-issued by Ludhiana stock exchange 26. LSE BULLETIN, Investor Education Series-1, FAQ on depository, April 2005- June 2005, page no.25 27. .http://www.bseindia.com/invdesk/invrights.asp 28. LSE BULLETIN, Investor Education Series-1, FAQ on depository April 2005- June 2005, page no.25 29. Op.cite. Refer no.13 30. http://www.bseindia.com/invdesk/invguide.asp 31. Indian securities market-issued by NSE

32. http://nseindia.com/content/assist/asst_invrights.htm 33. http://www.kiritsomaiya.com/PHDthesis/KIRIT%20SOMAIYA%20PH.D. %20ONE.pdf 34. .http://www.sebi.gov.in/faq/smdfaq.html 35. http://www.icsi.edu/Portals/57ad7180-c5e7-49f5-b282-c6475cdb7ee7/CS010705.pdf

36. Edward F.Mrkvicka, Jr.,The Rational Investor, part 4- chapter15,Broker And Your Money Probus Publishising Company Chicago, Lllinois-1991, page no 131

%20VOLUME

37. 22http://legalpundits.indiatimes.com/caselaws/data/securities_appellant_tribunal/2006/ 38. http://www.set.or.th/en/education/broker/broker_p4.html 39. http://www.nseindia.com/content/assist/asst_igcfaqs.htm#1 40. http://www.bseindia.com/invdesk/arbitprocd1.asp#arbi3 41. http://www.nseindia.com/content/us/fact2005_sec7.pdf 42. http://www.bseindia.com/invdesk/invguide.asp

ANNEXURE

QUESTIONNAIRE
Q1. Investor Income ? Upto 10,000 20,001-25,000 Q2. Investor Age ? Upto 25 26-50 51-75 76 above 10,001-15,000 Over 25,001 15,001-20,000

Q3. Are you aware about demat ? Yes No

Q4. The Nature Of Investment and When you do trading ?

Option

Occasionally

Frequentl y

Long term Medium term Short term Day trader

Q5. Which securities trade frequently by investors ? Equity Debentures Bonds Future and Options

Q6. Have you lost money in past below investment options ? Mutule funds Bank Deposits Shares No Nationalized or Private Company Deposits Derivatives

Q7. In which listed company do you invest ? NSC BSE Other exchange

Q8. Are you aware about investor grievances cell of NSE, BSE & LSE ? Yes No Can not say

Q9. Do you know about investor protection fund of stock exchanges ? Yes No Can not say

Q10. Do you like to attend the workshops/seminars if organized ? Yes No Can not say

Q11. Which Media do you prefer for investment ? TV Seminar At the Stock Exchange Magazines All

Q12. Which role of brokers in investor protection for you ? Important Not Important Can not say

Q13. Which is the best solution to protect investors rights ? Brokers and securities intermediaries should be more honest Wrongdoers should be severely and swiftly punished Increase regulation Improve management of and internal controls in companies Educate investors more effectively To what extent? Name : Adress : Phone No : INVESTOR COMPLAINT FORMS (For Matters related to SEBI) From: To Securities and Exchange Board of India Investor Grievance and Guidance Division P.B. No.19972, Nariman Point P.O. Mumbai 400 021 Date:

Dear Sir, Kindly take up the matter with the company for immediate redressal of my complaint, particulars of which are as under. 1. Name and address of the Investor 2. Name and Address of the Company. 3. Name of the Registrar & Transferagent (if any). 4. SEBI acknowledgement Ref. No. (In case of Reminder) 5. Type / category i) Issue / offers Refund Order / Allotment advice Revalidation of refund order Duplicate R/O for correct amount Duplicate R/O for correct amount Duplicate R/O for identity Cancelled Stock Invest (S.T.) R/O after details furnished Copy of encashed RO Duplicate RO for correct details Allotment against encashed SI. Duplicate RO. After correction Short refund ii) Non- Receipt of Dividend

iii) Shares non-receipt of certificate in / after Exchange of allotment Letter Conversion Splitting Transfer Endorsement Bonus Transmission Consolidation Duplication on submission of Indemnity Bond iv) Miscellaneous: non-receipt of Annual Report Offer of Rights Interest on delayed Refund Payment Registration of change dividend Interest on delayed dividend Non list of securities on stock exchange Any other

6.

Particulars of the Application / securities held a)Full Name of First Applicant / Securities holder b)Application Form No. / Folio No. (Sellers in case of transfer.) c) No. of securities applied / held d) Mode

of Payment

Cash

Cheque/D.D.

Stock Invest

No. e)

Dt. -

Drawn on

Application deposited at

f)

Bank Serial No.

g)

Photocopy of acknowledge slip enclosed

Yes

No

h) i) j) k) l)

Photocopy of acknowledge slip enclosed

Yes

No

Original Refund Order No. (In case of revalidation No.) Period for which dividend amount due Date on which securities were forwarded to company/Registrar Indemnity Bond sent for issue of duplicate If yes, date Yes No

7. 8. 9.

Other details if any, in brief Dates of earlier correspondence with the company / Registrar Enclosure, if any

Place: Date: Note:

Signature of the first applicant

It would be advisable to address the complaints to SEBI only if Company / Registrar has not responded in spite of having sent two reminders over a period of at least one month.