A Parliamentary committee today suggested that capital market regulator Sebi should "suitably" use the Unique Identification Number in its proposed scheme aimed at safeguarding investors' interest.
Following recommendations of a Joint Parliamentary Committee (JPC), Sebi had put in place a state-of-the-art Central Database of Securities Market Participants' and Investors Identification Numbers (MAPIN). MAPIN was notified in November 2003.
However, the scheme was later suspended.
Now, as the Sebi will be exploring an alternative scheme akin to MAPIN for further safeguarding the interests of the investors and other stakeholders, the Committee recommended that "Sebi should formulate a concrete proposal and perhaps suitably adapt the UID -- 'Aadhar' scheme to their optimum benefit".
"The Committee would like this (Sebi's proposed scheme) to become one of the priorities for Sebi as it would not only safeguard the interests of the market participants but accord credibility to Sebi as well," the panel report said.
It further said that all technicalities such as identity needs to be established for corporate entities, in addition to individual entities should be worked out well in advance.
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The work on MAPIN project was awarded to National Securities Depository (NDSL).
The panel expressed concern that after suspension of the scheme, both hardware and software of MAPIN and the data inventory collected by NSDL is still idling with the company.
It recommended that the infrastructure and the data inventory should be secured by Sebi without any further delay and put into safe custody so that it is not misused.
The panel also observed that while entering into contract with NSDL, no suggestions were invited from stakeholders on MAPIN system.
It has suggested to Sebi to seek public opinion so that maximum benefit of the proposed scheme can be obtained when it reaches the implementation stage.
The Committee chaired by Murli Manohar Joshi also noted that eventual suspension of MAPIN led to wasteful expenditure of Rs 11.54 crore collected from 3.84 lakh investors.