Investor Awareness Program 2015-16

ICAI- MCA Investors' Awareness Programme by Resource

Persons.
Name of Resource Person-

Investors Awareness Programme

An ICAI initiative under the guidance of the Investor
Education and Protection Fund of the Corporate Affairs
Ministry .

To safeguard the interest of the investors and to

create a transparent and robust investment
environment the government of India has taken
initiatives for such programmes with the help of
professional bodies.

The unknown unknown

"The greatest obstacle to discovery is not ignorance
but illusion of knowledge
There are known knowns. These are things we know
that we know . There are known unknowns. These are
things that we know we don't know . But there are also
unknown unknowns. These are things we do not know
we don't know .
Most of us have an illusion of knowledge with regard to
investment.
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INVESTOR EDUCATION AND

PROTECTION FUND
Investor Education and Protection Fund (IEPF),
managed by the Ministry of Corporate Affairs, has
been established under the Companies Act, 1956 for
promotion of investors awareness and protection of
the interests of investors. Activities undertaken by the
IEPF include educating and creating awareness
among investors through seminars and media and
funding projects pertaining to investor education
awareness and protection.

Investors Awareness Programme

--- Objectives of this programme
To make the Investors aware regarding :
Keys to Investing Success
Possible investment avenues,
How to appraise to invest,
Precautions to be taken before investing
Investment purchase procedure
The Regulators : SEBI,RBI,IRDA,ROC and others,
Remedies available against the mis doings in the
market
How to approach to the Regulators
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5 Keys to Investing Success

Key #1: Make Investing a Habit
Key #2: Set Realistic Goals
Key #3: Dont Take Unnecessary Risks

Key #4: Keep Time on Your Side

Key #5: Diversify
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Master
key#
Become
An
Informed
Investor

How to become an Informed Investor

Possess adequate expertise/ knowledge to take
informed investment decisions
Be aware of the risk-return profiles of various
investment products
Take precautions while dealing with the market
intermediaries
Get familiar with the market mechanisms and
practices as well as with their rights and obligations
have the right information, plan and make good
choices
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Available Investment avenues

Capital Markets Equity, Debentures, Primary
Capital market
Mutual Funds IPOs/ FPO, Secondary Markets,
dealing with Regd. Intermediaries,
Company Fixed Deposits,
Insurance Products: Term Life, Endowment
policies,ULIPs,dos and donts
Govt Schemes NSC,PPF,POS,KVP.
Bankings
Dubious Schemes
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15 Mantras to Wise Investing

Mantra 1
Invest only in fundamentally strong companies
Mantra 2
Read carefully-risk factors, litigations, promoters,
company history, project, objects of the issue and
key financial data

15 Mantras to Wise Investing

Mantra 3
Follow life-cycle investingYou can afford to take greater risks when you
are young.
As you cross 50, start getting out of risky
instruments.
By 55/60, you should be totally out of equity. ( You
can't afford to lose your capital when you have
stopped earning new money).
There are better things in life at that age than
watch the price ticker on TV!
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15 Mantras to Wise Investing

Mantra 4
Invest in IPOs
IPOs are a good entry point.
Mantra 5
Surely invest in every PSU IPO
Mantra6
Invest in mutual funds, but select the right fund
and scheme
Mantra 7
Learn to sell
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15 Mantras to Wise Investing

Mantra 8
Deal only with registered intermediaries
Mantra 9
Let not greed make you an easy prey!
Many scamsters are roaming around, to exploit
your greed.
Most scams rob small investors.
Be careful about the entity seeking your money.

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15 Mantras to Wise Investing

Mantra 10
Beware of the media, especially the stock-specific
advice on electronic media
Mantra 11
Don't get taken in by advertisements
Mantra 12
Beware of fixed/guaranteed returns schemes
Any one who is offering a return much greater
than the bank lending rate is suspicious.
Remember plantation companies-promised huge
returns (in some cases 50% on Day 1)!
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15 Mantras to Wise Investing

Mantra 13
Don't blindly take decisions based on summary
accounts
Mantra 14
Cheap shares are not necessarily worth buying
Mantra 15
Don't be fooled by Corporate Governance
Awards/CSR
There is a high incidence of fraudulent
companies upping their CG and CSR activities.
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Precautions
Primary Market:
Don't be influenced by any implicit/explicit
promise made by the issuer or any one else.
Don't invest only based on the prevailing bull run
of the market index or of scripts of other
companies in the same industry or scripts of
the issuer company/group companies.
Don't expect the price of the shares of the
issuer company to necessarily go up upon listing,
and forever.
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Precautions

Secondary Market
Don't undertake off-market transactions.
Don't deal with unregistered intermediaries.
Don't fall prey to promises of unrealistic returns
or guaranteed returns.
Don't invest on the basis of hearsays, rumors
and tips.
Don't be influenced into buying into fundamentally
unsound companies (penny stocks) based on
sudden spurts in trading volumes or prices or
favorable articles/stories in the media.
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Precautions-Secondary Market (2)

Don't get carried away with advertisements about
the financial performance of companies.
Don't blindly follow media reports on corporate
developments, as some of these could be
misleading.
Don't get misled by guarantees of repayment of
your investments (and returns) through post-dated
cheques.
Don't hesitate to approach the proper authorities
for redressal of your doubts/grievances.
Don't give signed blank DIS to your DP or to
your broker.
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Precautions
Dealing with Brokers & Sub-brokers
Don't deal with unregistered brokers / sub brokers or other unregistered intermediaries.
Don't execute any document with any intermediary
without fully understanding its terms and
conditions.
Don't leave the custody of your Demat
Transaction Slip book in the hands of any
broker/sub-broker.
Don't forgo obtaining all documents of transactions
even if the broker/sub-broker is well known to
you.
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Precautions
Mutual Funds
Don't invest in a scheme just because
somebody is offering you a commission or
some other incentive, gift etc.
Don't get carried away by the name of the
scheme/mutual fund.
Don't
be
guided
solely
by
the
past
performance of a scheme/fund or be taken in
by promises of future returns.
Don't forget to take note of the risks involved
in the investment.
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Precautions
Buyback
Don't submit multiple applications.
Don't forget to fill up the application legibly .
Don't mutilate the application form.
Don't send the application form to a wrong
address.
Don't send the application form after the
closure of the offer.
Don't forget to give complete information in the
application form.
Don't forget to sign the application form.
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Precautions
Collective Investment Schemes
Don't invest in a CIS entity not registered with
SEBI.

Don't get carried away by indicative

promised returns or by market rumours/
advertisements.

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or

Precautions
Derivatives
Don't start trading before reading and
understanding the Risk Disclosure Documents.
Don't trade on any product without knowing the
risk and rewards associated with it.

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PURCHASING PROCESS
From where to purchase the products?
Brokers: Brokers offer several services like purchase
/sale of equity, debt and derivative products, mutual
fund units, IPOs etc.
Banks : Many banks offer facilities for purchase /sale
of equity, debt and derivative products, mutual fund
units, IPOs etc. physically as well as through their
websites
Mutual Funds: Almost all Mutual Funds facilitate online
and physical buying/selling of mutual funds.
Stock Exchanges: Close ended mutual funds are traded
on stock exchanges and can be brought through brokers.
Open ended mutual funds can also be bought/sold on the
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PURCHASING PROCESS
Steps involved for becoming a capital market investor
The first requirement is a PAN Card. This is
mandatory for all investors.
The other requirements are a bank account and a
demat account. The demat account is normally linked
to a bank account in order to facilitate paying in
and out of funds and securities.
The next step is to select a broker and fill a KYC
form and enter into a broker-client agreement.
The broker then allocates a unique client ID , which
acts as the identification.
You are now ready to buy/sell securities.
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WHO REGULATES WHICH TYPE OF

ENTITY

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Grievance ! Where to go?

Ministry of Corporate Affairs Go to MCA21 e-Governance portal, which has a
dedicated online facility for filing of grievances on
www.mca.gov.in. with 'online status tracking
facility to enable monitor the progress
Go to www.investorhelpline.in. operated by MCA is
a dedicated portal to handle investor grievances
which takes up the redressal of the complaints
both with the concerned regulators as well as with
the companies.

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Grievance ! Where to go?(2)

Securities and Exchange Board of India

Capital market related grievances not resolved by the
concerned company or the intermediary, investors
can approach SEBI at www.sebi.gov.in.
The following kinds of complaints can be filed:
Type-I: Refund Order/ Allotment Advise.
Type-II: Non-receipt of dividend.
Type-III: Non-receipt of share certificates after
transfer.
Type-IV: Debentures.
Type-V: Non-receipt of letter of offer for rights.
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Grievance ! Where to go?(3)

Type VI: Collective Investment Schemes

Type VII: Mutual Funds/ Venture Capital Funds/
Foreign Venture Capital Investors/ Foreign
Institutional Investors/ Portfolio Managers,
Custodians.
Type VIII: Brokers/ Securities Lending
Intermediaries/ Merchant Bankers/ Registrars and
Transfer Agents/ Debenture Trustees/ Bankers to
Issue/ Underwriters/ Credit Rating Agencies/ DP.

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Grievance ! Where to go?(4)

Type IX: Securities Exchanges/ Clearing and
Settlement Organizations/ Depositories.
Type X: Derivative Trading
Type XI: Corporate Governance/ Corporate
Restructuring/ Substantial Acquisition and Takeovers/
Buyback / Delisting / Compliance with Listing
Conditions

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Grievance ! Where to go?(5)

Stock Exchanges
The following types of complaints should be filed with
the concerned stock exchange:
Complaints related to securities traded/listed with
the exchanges.
Complaints regarding trades effected in the
exchange with respect to the companies listed on it.
Complaints against the brokers/sub-brokers of the
exchange.

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Grievance ! Where to go?(6)

Reserve Bank of India

The RBI website-www.rbi.org.in-has a dedicated
facility for investor grievances handling and resolution.
All complaints relating to banks and company fixed
deposits should be filed with RBI.

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Grievance ! Where to go?(6)

Some IPEF assisted Websites for IE

An Investors helpline www.investorhelpline.com
A website through Midas Touch Investors Association to provide a
mechanism for Redressal of investor grievances and to create
solutions

Watch Out Investors www.watchoutinvestors.com

This is a National Registry of economic defaulters and covers
information on convictions by various regulatory bodies. The registry
contains over a 100,000 entries

IPEF Website www.ipef.gov.in

This is an excellent knowledge sharing platform on all investor related
subjects an excellent learning32 tool

Role of Investor Associations

It is often difficult for an investor to fight for his rights at
an individual level.

The list of investor associations/NGOs/voluntary

agencies registered with IEPF and SEBI is available on
www.iepf.gov.inand www.sebi.gov.in.
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Investors Awareness Programme

Thank you
(Name of the Presenter)
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