Simply Knowing Investors’ Rights Vs. Strongly Exercising to the Rights
What makes to an investor or financial consumer to get success or turn failure and to recover loss, if any depends on the level of information about his or her rights. But more importantly, it is seen in several instances that investors know their rights but they are failed to exercise their rights.
What defines the success or failure of investors also questions to financial law, policy makers and ultimately the prescribed rules and the acts which have been laid down. Such nicely prescribed rules under the act empower to the investors but limited to the extent of making stakeholders aware but reasonably lag behind when it comes to see the percentage of grievances vis-a vis exercising rights to protect their interest.
This blog entails certain regulations or legislations framed in India to regulate and protect the interest of investors. The important provision of The Companies Act, 2013 has sets of the code of conduct for the corporate sector. The general perception of common man who are also stakeholders is that the act is meant for companies and nothing to do with them. In relation to issuance, allotment, and transfer of securities, and disclosures to be made in public issues are actually meant for them but either several investor do not know or they fail to exercise their rights.
Similarly, The SEBI Act, 1992, which established SEBI to protect investors and develop and regulate securities market, the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (IEPF Rules) and The Securities Contracts (Regulation) Act, 1956, which regulate the transactions in securities through control over stock exchanges. The Depositories Act, 1996, provides transfers of ownership of dematerialized shares and maintenance of the same.
Most of the regulators have put in place the online system for redressal of grievances which provides ease of filing complaints. However, most of the sufferers amid others are found to be the senior citizens and differently abled investors as either they feel difficulty in travelling to premises of these regulators’ or many of them are found to be non-computer-savvy who do not understand the requirements of simpler but difficult online compliances for them.
A must to appreciate is notification of RBI dated October 4, 2017 which provided with Banking Facility for Senior Citizens and Differently abled Persons at home. Though one may question on how effective this has been actually in practice and how many such beneficiary are so far but intent of such notification provides a relief.
Here…a must to do is now that the regulators should take cognigence of especially the senior citizen’s and differently abled investors’ inability to avail the benefits provided by the rules and laws under their respective jurisdictions. They must consider to add provisions to their respective laws and ensure that a segment of investors get benefit at their door steps.
It should be added to the services of brokers or companies both listed or unlisted having shareholders that they must provide a look back service to investors which otherwise they hardly pay personal attention after raising investible surplus from them. This is expected to bring a greater effective system in the financial and capital market in the country and an empowerment to investors to get their grievances addressed.