SEBI’s expenditure on investor protection and education at 10-year low in FY24
August 24, 2024
SEBI, in its annual report, says it has a digital strategy for investor education with emphasis on use of social media platforms.
Policymakers are raising alarm over retail investor speculation in the F&Os and increased flow of household savings into the stock market, but data show they are not putting money where the mouth is.businessline’s analysis of markets regulator SEBI’s (Securities and Exchange Board of India) annual accounts for the last 10 years shows that utilisation of the SEBI Investor Protection and Education Fund (IPEF) hit a record low of ₹2.8 crore in FY24. Expenses from IPEF stood at ₹11.9 crore in FY23, ₹6.8 crore in FY22, and ₹28.8 crore in FY21. The expenses as a percentage of the fund have remained in the range of 0.5-5 per cent in the last five years.
The Fund balance, however, has been steadily rising over the years. From FY23 to FY24, it more than doubled in value to reach ₹533 crore as of March 2024.
SEBI IPEF Regulations, 2009 stipulate that the fund is to be used for seminars, awareness programmes, aiding investors’ associations, and for salaries of Ombudsman among others. The additions to the Fund come from incomes from investments and other receipts including grants and contributions etc from SEBI Board.
SEBI, in its annual report, says it has a digital strategy for investor education with emphasis on use of social media platforms.
SEBI did not respond to businessline’s queries on utilisation of IPEF. SEBI’s FY24 annual report shows that it conducted 43,826 awareness programmes nationally, including regional investors seminars, workshops, and others, during the fiscal.
Investors and market trackers say IPEF needs better monitoring and the education arms of SEBI such as the National Centre for Financial Education (NCFE) and the National Institute of Securities Market (NISM) must be leveraged better.
Better monitoring
V Nagappan, investor and Past President at Hindustan Chamber of Commerce, says there should be a transparent reporting and monitoring mechanism on the utilisation of the investor protection funds maintained by SEBI and other Market Infrastructure Intermediaries. “It would be better if all these funds are pooled together under a Trust and transparently disclosed to investors,” he suggests.
SEBI, in its annual report, says it has a digital strategy for investor education with emphasis on use of social media platforms.
Besides SEBI IPEF, the stock exchanges and depositories also have similar funds that have a balance of Rs 2793 crore and Rs 127 crore respectively, as of March 2024.
“More than amount spent on investor education, we need to see if the spends have the desired impact. SEBI must make better use of the NISM infrastructure to create a digital platform for investor education, especially in today’s speculative climate” said Shyam Shekhar, investor and founder, ithought Advisory.
SEBI, in its annual report, says it has a digital strategy for investor education with emphasis on use of social media platforms. “The number of impressions [of social media campaigns] increased from over 0.5 crore in April 2023 to an average of over eight crore impressions a month for financial year 2023-24,” the regulator said.
[The Hindu Business Line]
