Sebi's investor charter to be notified next month, won't be legally binding

Charter to act only as a guide; other regulators such as Irdai, PFRDA to come out with their charters only next year

The Securities and Exchange Board of India (Sebi) is likely to notify the investor charter' early next month.

Other regulators, such as the Insurance Regulatory and Development Authority of India (Irdai), and Pension Fund Regulatory and Development Authority (PFRDA) would come out with their charter only next year, said two people in the know.

According to the sources, the investor charter will have the mission and vision of Sebi for investors. It will also include the rights and responsibilities of investors. The charter, however, will be treated as reference and have no legal binding.

Besides, market intermediaries including stock exchanges, mutual funds and listed firms will have dos and don'ts for investors in the securities market, in line with corporate governance norms.

The finance minister in the Budget had proposed setting up an investor charter on all financial products, including mutual funds and insurance.

The investor charter however may not have a monetary compensation mechanism, to pay investors who suffer losses due to mis-selling or any other fraudulent activity.

It will aim to empower investors by guaranteeing them time-bound services from all the intermediaries and departments that come under the purview of financial regulators, the person added.

The regulator is learnt to have finalised the final blueprint in consultation with the finance ministry and other stakeholders, and has made it simple and easy for investors.

Sebi at its board meeting in September had approved the charter. It was then further deliberated with market infrastructure institutions (MIIs) and other registered intermediaries.

The objective for formalising a charter is to help investors in the securities markets get all the relevant information at one place. This includes their rights, services provided by various entities, timelines related to various services and investor grievance and redressal mechanism.

Sebi’s Investor Charter and the Investor Charters of various intermediaries / entities will be displayed on the website of the regulator and also that of various intermediaries.

• Sebi to launch charter in November
• Regulator will have basic mission and vision for investors
• Market intermediaries and listed firms will have separate charter in line with governance norms
• In case of monetary loss, Sebi ensure timely action
• Other regulators charters will take some more months to finalise the charter