SEBI announces rights and responsibilities of investing in securities market

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Securities Exchange Board of India (SEBI) on Wednesday released an investor charter outlining the rights and responsibilities of investors investing in the securities market. 

The market regulator said it aims to protect the interest of investors by enabling them to understand the risks involved and invest in a fair, transparent, secure market, and to get services in a timely and efficient manner. 

As per the investor charter, investors are entitled to fair and equitable treatment, can expect redressal of investor grievances filed in SCORES in a time bound manner and get quality services from SEBI recognised Market Infrastructure Institutions and SEBI registered intermediaries, regulated entities or Asset Management Companies (AMCs). 

Budget 2021 had proposed investor’s charter with an objective to protect investors’ from mis-selling of all financial products. 

The charter released by SEBI also vests certain responsibilities on investors, including dealing with SEBI recognised Market Infrastructure Institutions and SEBI registered intermediaries or regulated entities only, updating their contact details in case of any change, ensuring grievances are raised within set time limits and that their accounts are operated only for their own benefits. 

The charter warns investors against making any payments in cash beyond the prescribed limit when making investment in the securities market and sharing sensitive financial information, such as account details, login IDs, passwords, etc with anyone. 

Before making an investment, investors must read and understand documents related to a financial product, know the risks involved and read about various fees, margins and premiums, among other charges involved in a transaction, as stated by SEBI in the charter. Among other things that investors must do, they should know about the Investor Grievance Redressal Mechanism, keep track of account statements and bring any discrepancy to the notice of the concerned stock exchange, intermediary or AMC and preserve all relevant documents related to documents that will come in handy when rising grievances. 

SEBI said in its official statement that starting from January 2022, all SEBI regulated entities will be required to disclose the average time taken for solving each grievance on their respective websites. Additionally, SEBI has established an alternate dispute redressal mechanism against brokers and depository participants for cost-effective and timely dispute resolution. 

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