The Investor Protection and Education Fund (IPEF) with market regulator Sebi remains grossly under-utilised, reveals data gathered by FE through an RTI filing.
This is despite the fact that market development- an integral part of which is boosting investor confidence – is one of the prime objectives of Sebi, in addition to performing its regulatory functions.
The Securities and Exchange Board of India or Sebi spent less than 1% of the R50 crore fund in the 2009-10 fiscal even as the fund has grown substantially since 2008. To be precise, Sebi spent a meagre R4.6 lakh out of R49.82 crore under IPEF as on March 31 2010.
The IPEF, set up in July 2007, had R13.15 crore as on March 31, 2008 which increased to R16.63 crore a year later. However, until March 31 2009, Sebi had not spent even a single penny from this fund.
Sebi was apparently unable to give a valid reason for the under-utilisation of the fund in the RTI reply. It said: ?In case you are not satisfied with the reply, you may appeal to Prashant Saran, whole time member and Sebi Appellate Authority.?
Brokerage houses told FE that investor awareness is so low in the country that out of the 120 crore people in India only 1.8 crore have demat accounts, highlighting that only 1.5% of the people in the country are aware of basic investor details.
Expressing surprise on the under-utilisation of funds, Prithvi Haldia, chairman Prime database said: ?It is astonishing to learn that Sebi has spent only R4.6 lakh towards investor education and awareness.?
?Sebi should aggressively utilise the IPEF funds. This will not only make people aware but will also reduce the number of frauds and cases of investor cheating that take place in the country,? said Jagannadham Thunuguntla of SMC Global Securities.
Sebi on its investor relation website says that the IPEF has the purpose of promoting investor education and awareness that shall include educational activities (seminars, training, research and publications) and awareness programmes.
Created in July 2007, the administration of the fund is handled by a seven- member advisory committee comprising Sebi officials and outside experts.