Sebi to seek extra funds for investor programmes

To bolster awareness among investors and ring-fence them from possible frauds, capital markets regulator

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Sebi plans to seek additional funds from the government for strengthening its IPEF (Investor Protection and Education Fund) programmes.

Sebi has identified empowerment of investors, strengthening of enforcement and supervision framework and capacity building as among its core focus areas for 2014-15.

The proposal to boost IPEF allocation, along with other efforts to help it execute its regulatory and investor protection functions, would be discussed at the Sebi board meeting here tomorrow, which is likely to be its last meet in the current financial year ending on March 31.

With expenses towards various investor protection and education initiatives estimated to be nearly Rs 55 crore for next fiscal, Sebi may seek board's approval for additional funding for IPEF, a senior official said.

Investor Protection and Education Fund (IPEF), set up by Sebi, had a corpus of Rs 35 crore at the end of January 2014.

Besides to ensure adequate funds are at its disposal, Sebi plans to request the government to allocate funds from Investor Education and Protection Fund (IEPF).

The proposal, that focuses mainly on investor awareness and protection, for next financial year would be placed before the board, which is also likely to discuss proposals aimed at bolstering financial resources of Sebi.

The regulator has broadly identified four core areas of new activities for 2014-15 period. These steps are aimed at further increasing the depth of the domestic capital market and also to ring-fence investors from fraudulent activities.

Investor awareness and education, enlarging the reach amongst the investors and potential investors through regional and local offices, manpower requirement and capacity building, enforcement actions and raising standards of supervision and enforcement in the marketplace are among focus areas.

The Sebi board is also expected to consider a significant revision in fee charges from various entities so as to meet expenses for its regulatory and investor-centric activities.

Meanwhile, Sebi wants to recover legal expenses incurred in such litigations from penalties imposed by it on defaulters before crediting the same to the government's coffers.

The watchdog incurred litigation expenditure in the range of Rs 4-5 crore in each of the past three financial years and the same could be higher this fiscal.

Further, Sebi is also considering to charge 'processing fees' for various service requests from companies, stock exchanges and market intermediaries, as many of such services are being provided for free despite significant costs incurred by the regulator in such matters, sources said.

Fees are proposed to be levied on all service requests, barring investor complaints, while existing fees can be hiked for services like informal guidance and consent settlement.

These are based on recommendations made by a Committee on Rationalisation of Financial Resources (CRFR).

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