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APJEM 
Arth Prabhand: A Journal of Economics and Management    Vol.1 Issue 8, November 2012, ISSN 2278‐0629  

 

INVESTOR PROTECTION MEASURES BY SEBI
DR. KVSN JAWAHAR BABU*; S. DAMODAHR NAIDU**
*Professor,
KMM Colleges,
Ramireddipalli,
Tirupati.
**Professor,
KMM Institute of Postgraduate Studies,
Tirupati.

            Pinnacle Research Journals                   72       http://www.pinnaclejournals.com  
                                                                                    

ABSTRACT
Investor protection is one of the most important elements of a thriving securities market or other financial investment institution. Investor protection focuses on making sure that investors are fully informed about their purchases, transactions, affairs of the company that they have invested in and the like. SEBI had issued guidelines for the protection of the investors through the Securities and Exchange Board of India (Disclosure and Investor Protection) Guidelines, 2000. The measures in practice gave mixed results. On the positive front, many banks sponsored mutual fund had launched assured return schemes and lured the investor's huge contribution. When they failed to deliver the promise, SEBI gave directive to sponsor bank to honour the commitment made by the mutual funds, which cost the sponsor banks over Rs 2000 crore. SEBI has introduced a supplementary process of applying in public issues, viz. ASBA process. The application money shall remain blocked in the bank account till finalisation of the basis of allotment in the issue or till withdrawal / failure of the issue or till withdrawal / rejection of the application, an initiate that safeguards the interests of both issuing company and the investor. Investor education campaigns have been yielding positive results to some extent, still lot more needs to be done. Indian investors have been steadily fleeing the market, despite the apparent spread of ‘equity cult’, which calls for immediate attention of the apex body to frame and effectively implement the measures to protect the interests of small investors, and restore their confidence in the stock market.

______________________________________________________________________________ INTRODUCTION
The Securities and Exchange Board of India Act, 1992 (the SEBI Act) was amended in the years 1995, 1999 and 2002 to meet the requirements of changing needs of the securities market and responding to the development in the securities market. The Primary function of Securities and Exchange Board of India under the SEBI Act, 1992 is the protection of the investors’ interest and the healthy development of Indian financial markets. No doubt, it is very difficult and herculean task for the regulators to prevent the scams in the markets considering the great difficulty in regulating and monitoring each and every segment of the financial markets and the same is true for the Indian regulator also. But what are the responsibilities of the regulators to set the system right once the scam has taken place, especially the responsibility of redressing the grievances of the investors so that their confidence is restored? The redressal of investors’ grievances, after the  

APJEM 
Arth Prabhand: A Journal of Economics and Management    Vol.1 Issue 8, November 2012, ISSN 2278‐0629  

 

scam, is the most challenging task before the regulators all over the world and the Indian regulator is not an exception. SEBI had issued guidelines for the protection of the investors through the Securities and Exchange Board of India (Disclosure and Investor Protection) Guidelines, 2000.

METHODOLOGY OF PAPER: The paper is conceptual in nature primarily, largely based on secondary source of information, and focuses on various investor protection measures taken by SEBI from time to time. Though the guidelines issued by SEBI are not covered exhaustively, attempt is being made to evaluate the directives of the apex body pertaining to...
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