(a) whether the Government have appointed a committee under the
Chairmanship of Dr. Mitra of National School of Law, Bangalore to
study the problems of small investors;
(b) if so, the terms of reference made to the Committee; and
(c) the time by which the Committee is likely to submit its report
to the Government?
MINISTRY OF STATE IN THE MINISTRY OF FINANCE (BALASAHEB VIHE PATIL)
(a) On the suggestion of the Ministry of Finance, the Securities and
Exchange Board of India (SEBI) requested Prof. N.L. Mitra, former
Principal, National School of Law, Bangalaore, to conduct a study and
prepare a draft on legislation for investor protection.
(b) The terms of reference for this study include, inter-alia,
examination of the necessity for a separate law for investor
protection vis-Ã -vis existing legislation; identification of
provisions/powers which a regulatory authority must have for
investor protection; to examine whether the regulator should have
the power to restrict access to the capital market by prohibiting
issues under certain circumstances; to consider provisions for
disgorging of undue gains and to guard against asset stripping and
siphoning of funds; to identify provisions for recovery of money
from the company/its directors and to compensate aggrieved investors;
examination of the existing redressal mechanisms for investors etc.
(c) Prof. Mitra has been requested to complete the study and submit
the report at the earliest.
Annexure referred to in the reply to Part (b) of Lok Sabha Unstarred
Question No. 4233 for answer on Friday, the 15th December 2000, by
Shri Kirit Somaiya regarding Committee on Small Investors
Terms of Reference for the Study on Legislation for Investor
Protection
1. Whether there should be a separate law for investor protection or
whether existing laws such as the SEBI Act can be amended to
incorporate provisions relating to investor protection.
2. To define the word `investor` and to determine the regulatory
authority for different securities/instruments through which
resources are raised from investors.
3. To identify the provisions/powers which a regulatory authority
should have for investor protection.
4. To identify the stage at which there should be legal protection
for investors and to decide on the extent of such protection.
5. To examine whether the regulator should have powers to restrict
access to the capital market by prohibiting issues under certain
circumstances.
6. To consider provisions in the legislation for disgorging of
undue gains and to guard against any asset stripping and siphoning
of funds.
7 To identify the provisions relating to prevention, penalty or
deterrent provisions.
8. To identify provisions for recovery of money from the company
and its directors and for compensation to aggrieved investors.
9. To examine the redressal mechanism for investors - whether there
should be a separate court or tribunal which all investors could
approach.
10. To suggest a mechanism for co-ordination/consultation amongst
the regulatory authorities for the capital market.
11. To identify the provisions relating to prevention, investigation,
penalties and enforcement in respect of investor protection.