The Hindu Business Line : SEBI raising money for Investor Protection Fund

The Securities and Exchange Board of India (SEBI) is in the process of raising resources for setting up an Investor Protection Fund and for this, there is a need to change the SEBI Act, said Mr M. Damodaran, Chairman of SEBI.

The fines and penalties levied from listed companies would be used to set up the fund.

The draft of the SEBI Act has been forwarded to the Inter-Ministerial Committee and after which it would be placed before Parliament. The Bill, which is made on line with the US Securities Act, is likely to be enacted by mid-2007, Mr Damodaran said, while answering to queries at the CEO conclave organised by the Kerala Management Association here on Monday.

SEBI, he said, is also in the process of conducting a countrywide investor education programmes to encourage more participation of retail and small investors into the stock markets. The programmes will commence by the second half of 2007.

The board has also taken steps to simplify the procedures of de-listing of the inactive, closed down and sick companies. This was announced in the SEBI Web site for the last 21 days. He pointed out that 10 more days are left for making comments on this.

Awareness programme

On the low investments in the stock markets from Kerala, Mr Damodaran pointed out that there is a need for massive awareness programme to attract investors.

He suggested setting up of investor advisors to encourage participation in stock exchanges. However, there are only 53 companies that have been listed from the State with a market capitalisation of less than Rs 10,000 crore. This is very minimal when compared to other States, he said.

Physical infrastructure

Mr Damodaran also stressed the need for developing physical infrastructure facilities, especially roads in Kerala, for the economic advantage of the State. He pointed out that the major success in India in the last 10 years is in the road sector. However, the conditions of roads in the State are pathetic. The State had advanced much ahead in social infrastructure but lacks in physical infrastructure, he said.

There should be an orchestrated effort from CEO's in the State to persuade the political leadership for giving priorities in developing physical infrastructure facilities. There is a need for prioritisation in decision making as was done by other States while dealing with projects in the State, he added.

Mr Damodaran also called upon the CEOs to communicate aggressively about Kerala outside the State, as there are windows of opportunities in the areas of ayurveda and tourism segments. However, he stressed the need for a quality control service in these areas.

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