National Council of Applied Economic Research
Five investor education workshops with financial regulators
NCAER’s newly established Investor Education and Protection Fund (IEPF) Chair Unit’s organized the first of its series of five workshops on Investor Education and Protection with financial regulators. This session, focusing on the securities markets, was held virtually and was attended by more than 60 participants.
India’s 2014 Pradhan Mantri Jan Dhan Yojana programme helped create robust digital financial services, increasing the proportion of those above the age of 15 with a bank account to nearly 80% in 2017, compared to just about 35% in 2011. Digitization has brought banking to many more during the pandemic. But many are first-time users and don’t trust unfamiliar ways of handling their money. At the same time, the demand for entry into investment markets has surged. This surge in interest in India’s financial markets places a big responsibility on the financial regulatory authorities to demystify finance and encourage informed and safe investing. The National Strategy for Financial Education 2020-25 recognizes the unique challenges of creating a financially aware and empowered India, and the need for convergence of efforts by multiple stakeholders that regulate and manage India’s financial resources.
Even as the Strategy lays out the broad contours for protection and education, there is a need to understand its coverage of specific operations in the securities markets. Besides its large retail participation, the securities market is also perhaps the most ‘reformed’ markets of India. It is endowed with a regulatory architecture that is recent, and it operates through institutions like exchanges, clearing corporations and depositories that are based on the most contemporary design. It has intermediated impressive sums of finances, whether that be through Initial Public Offerings, or in secondary market volumes. Depending on the segment of the market that is being discussed, both inadequate retail participation (in bonds, gold exchange traded funds and others) and excessive retail participation (in derivatives, for example) reflect likely absence of widespread information about different market segments among participants. Assessing the design and implementation of the strategies for investor education and protection are the key goals of the workshop series.
This workshop featured insights from leading securities markets experts, as well as the regulators. Manoj Pandey, Joint Secretary, Ministry of Corporate Affairs & CEO, IEPFA, delivered the keynote address and the workshop was chaired by G Mahalingam, Whole-Time Member, Securities and Exchange Board of India.
Inaugurated on December 21, 2020 with a keynote address by RBI Governor Shaktikanta Das, this series of five NCAER workshops covers investor education issues in securities market, insurance, pension funds and credit markets. These workshops with key regulators are an opportunity for participants to both learn from key regulators about their strategies for investor education and to contribute to refining the priorities for action and for creating relevant further research and knowledge base in this area.
