SEBI's fund to protect investors is operational now

SEBI's fund to protect investors is operational now.

After the delay of almost two years, market regulator SEBI has operationalised the fund to protect and spread awareness among investors, including giving help to investor associations in legal matters against listed entities.

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"There shall be a fund to be called the Investor Protection and Education Fund," regulations notified in official gazette stated here.

The fund has been set up with retrospective effect from July 23, 2007. SEBI had, by way of an executive order, created the fund on July 23, 2007 by crediting an initial corpus of Rs 10 crore out of the SEBI General Fund.

"The fund shall be utilised for the purpose of protection of investors and promotion of investor education and awareness," SEBI regulations said.

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According to the regulations, the fund can be used for aiding investor associations recognised by the SEBI to undertake legal proceedings in the interest of investors in securities, which are listed or proposed to be listed.

However, such an aid must not exceed 75 per cent of total expenditure on legal proceedings. Also such aid must not be considered for more than one legal proceeding in a particular matter.