The Securities and Exchange Board of India (SEBI) is in the process of raising resources for setting up the Investor Protection Fund. The fines and penalties levied from the listed companies would be used to set up the fund, SEBI chairman M Damodaran told reporters on the sidelines of a CEO summit.
The setting up of the investor protection fund would require amendments to the SEBI Act 1992, he said, adding the draft amendments to the Act had been sent to the inter-ministerial committee.
This would later be placed before Parliament either in the tail end of this session or during the budget session, he said, adding, the bill is likely to become law by the second half of 2007. He said the new Act would be on the lines of the US Security Act.
The market regulator would be conducting a massive investor education programme to educate small and retail investors, he said.
He said the market regulator is in the process of simplifying the process of delisting of sick and closed-down companies. A draft scheme for facilitating de-listing had been put up recently on the SEBI website and responses are awaited.
The SEBI chairman also called for an orchestrated effort by the industry to engage the political leadership to fix the basic needs in infrastructure to support investments.