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SEBI (INVESTOR PROTECTION AND EDUCATION FUND) REGULATIONS, 2009

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SEBI in exercise of the powers conferred by section 30 of SEBI Act, 1992, SEBI made the SEBI (Investor Protection and Education Fund) Regulations, 2009. 

Regulation 4 provides for the Amounts to be Credited to the Fund which are:

(i) Contribution grants and donations given to the Fund

(ii) Security deposits held by stock exchanges in respect of public issues and rights issues, in the event of de – recognition of such stock exchanges

(iii) Amounts in the Investor Protection Fund and Investor Services Fund of a stock exchange, in the event of de – recognition of such stock exchange

(iv) Interest or other income received out of any investments made from the Fund

(v) grants and donations given to the fund by CG, SG or any other entity approved by SEBI for this purpose; 

Utilization of Fund The fund shall be utilized for the purpose of protection of investors and promotion of investor education and awareness in accordance with these regulations. 

The fund may be used for the following purposes, namely:-

(i) Educational activities including seminars, training, research and publications, aimed at investors;

(ii) Awareness programmes including through media – print, electronic, aimed at investors;

(iii) Funding investor education and awareness activities of Investors‟ Associations recognized by SEBI;

(iv) Aiding investors‟ associations recognized by SEBI to undertake legal proceedings in the interest of investors in securities that are listed or proposed to be listed;

(v) Refund of the security deposits which are held by stock exchanges and transferred to the Fund consequent on de – recognition of the stock exchanges, in case the concerned companies apply to SEBI and fulfill the conditions for release of the deposit;

(vi) Expenses on travel of members of the Committee, who are not officials of the Board, and special investees to the meetings of the Committee, in connection with its work;

(vii) Salary, allowances and other expenses of office of Ombudsman.

Condition for Aid The aid shall be given by SEBI to investors‟ associations, in accordance with the guidelines made but it and subject to the following conditions:-

(i) Aid shall not exceed seventy – five per cent, of the total expenditure on legal proceedings;

(ii) Such aid shall not be considered for more than 1 legal proceeding in a particular matter;

(iii) If more than one investors‟ association applies for seeking legal aid, the investors‟ association whose application is received first, shall be considered for such aid. 

Constitution of the Committee SEBI shall constitute an advisory committee for recommending activities that may be undertaken directly by the Board or through any other agency, for utilization of the Fund for the purposes referred in these regulations. 

The Committee shall consist of the following members, namely:-

(i) The Executive Director of SEBI in charge of Office of IAE who shall be the Convener of the Committee

(ii) 2 other officials of SEBI

(iii) 5 other members who have expertise about the securities market and experience in matters of investor grievance Redressal or investor education.

The term of office of members shall be 2 years, which may be extended for a further period of 2 years. 

Any vacancy arising out of resignation, retirement or death of a member or for any other reason shall be filled by the Board for the remaining period of the term of such member. SEBI may dissolve and reconstitute the Committee if SEBI is of the opinion that the Committee is unable to discharge the functions and duties imposed on it by or under these regulations.

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