Investors who have had to bear with the tardy judicial process for redressal of grievances may soon have a new committee on the lines of the consumer court.
The panel, which is set up by the government to draft a comprehensive bill for investors protection, may make it a right for investors to get monetary compensation from companies and financial intermediaries.
It is looking into investor protection provisions under various regulations such as the Sebi Act, the Companies Act and the NBFC Act. It will also suggests ways to streamline the investor grievance redressal mechanism.
The panel may moot a separate regulatory framework based on the provision of investor protection under various acts and provide for comprehensive legislation.
The government had earlier asked the Bangalore-based National Law School to study the existing provisions in different Acts and look at the international practices and suggest ways to improve the investor protection mechanism in the country.
Another committee, which had representatives from the Reserve Bank of India, the Securities and Exchange Board of India, and the Department of Company Affairs, was also asked to give inputs to this study.
This committee held a meeting in Mumbai this week, where it was suggested that investors should be given the right to get monetary compensation from companies and financial intermediaries.
At present there is no provision in the Sebi Act, the RBI Act, the NBFC Act or the Companies Act for monetary compensation to investors who have been cheated or lost money. The only resort for them is to move civil courts for redressal.
"An investor who may have to get a compensation of say Rs 10,000 will have to go to court and face long draw legal battle to get the amount," sources said.
