INDEX

 

 

 

                    Contents                                                                                   Page no

 

 

  1. Conditions of Operation                                                                         2-5
  2. Schedule I-Recognition form                                                                6-12
  3. Schedule II-Renewal form                                                                    13-16
  4. Schedule III-Territorial jurisdiction of SEBI offices                            17

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CONDITIONS OF OPERATION OF INVESTORS’ ASSOCIATIONS

 

  1. Formation
    1. A society registered under the Societies Registration Act, or formed as trusts or incorporated companies are eligible for recognition as an investor association.
    2. The society / trust/ company shall be in existence for a minimum period of at least two years.

                                                              i.      provided that SEBI shall grant exemptions in exceptional cases

                                                           ii.      The primary objective establishment shall be -offering bona fide protection of interests of the investors / consumers and other allied services.

 

  1. Membership
    1. The Association shall have a minimum of 100 members.
    2. The eligible members of the Association shall be

                                                              i.      individual shareholders

                                                           ii.      non profit organizations

                                                         iii.      Provided that the Association shall discontinue the membership granted to any body corporate or institution within three months of obtaining recognition. 

 

  1. Management & Governance
    1. The Association shall have rules, regulations and /or bye-laws for the governance and management of the Association. 
    2. The rules, regulations and or bye-laws of the Association shall be in conformity with the conditions for recognition.
    3. The Association shall be managed by a Governing Board/Management Committee with not less than 7 members, directors in case of incorporation as a company.
    4. The election of members of the Governing Board / Management Committee shall be held at least once in 3 years. 
    5. In case of a company, the provisions of the Companies Act relating to appointment / election of Directors shall apply.
    6. None of the members of the Governing Board / Management Committee / Board of Directors or any other office bearer shall be a person registered as an intermediary with SEBI or shall be a director (other than independent professional director) on the Board of any body corporate whose shares are listed on a recognized Stock Exchange(s).

 

 

 

  1. Recognition
    1. An application for recognition shall be made in the format specified in Schedule I.
    2. The application shall be accompanied with the following documents

                                                              i.      Certified copy of the certificate of registration/incorporation

                                                           ii.      Certified copy of the trust deed, society deed, Memorandum & Articles of Association,

                                                         iii.      Certified copy of the register of members.

                                                         iv.      Certified copy of the resolution passed to approach SEBI for recognition.

                                                            v.      Certified copies of last three years audited annual reports.

                                                         vi.      Sample copies of publications, if any.

                                                       vii.      And any other document /(s) as sought by SEBI

 

  1. Grant of recognition

a.An Investors’ Association shall be initially granted a provisional recognition for a period of 1 year.

b.      SEBI may survey the infrastructure at the disposal of the Investor Association while granting the recognition.

c. The activity of the Association shall be monitored during the period of provisional recognition.

d.     If, at the end of this period, considering the performance of the Association, the provisional recognition shall be extended by one year.

                                                        i.            provided that such extensions shall be granted upto a maximum of three one year terms.

 

6.      Renewal of recognition

a.The renewal of recognition of the investor association shall be for a period of three years.

b.      For the purpose, the association shall have to apply to SEBI in the format specified in Schedule II at least three months prior to the expiry of the recognition

                                                              i.      provided that SEBI shall entertain cases beyond the stipulated period in fitting cases.

 

7.      Territorial Jurisdiction

a.The applications for recognition by Investors’ Associations shall be made at the respective regional offices as per the territorial jurisdiction as given in Schedule III.

b.      The Investor Associations shall co-ordinate their activities with the respective regional offices of SEBI.

 

  1. Code of conduct for the Investors’ Association 
    1. The Association shall not carry on any activity specifically prohibited under or is in contravention of the Securities Contract (Regulation) Act 1956, Securities and Exchange Board of India Act 1992, and rules, regulations, and circulars and notifications made there under or any other law in force. (In the form of a declaration to be given along with the application.)

 

  1. Reimbursements under the Investor Protection and Education Fund

The recognized Investors’ Associations shall be eligible to claim the following reimbursement of the expenses from SEBI:-

 

    1. Capital expenditure

                                                              i.      Amount-Eligible Associations shall be able to claim a one time grant of upto Rs 2.5 lakhs

                                                           ii.      Eligibility of Associations-An Association whose recognition with SEBI has been renewed for a period of 3 years shall be eligible to claim the capital expenses. An association which has been granted provisional recognition shall not be eligible to claim capital expenses.

                                                         iii.      Items -Installation of computer terminals, database on companies, internet facilities including website development and infrastructure items-fax machine, xerox machine, tables, chairs, cupboards, laptop, video projector to be claimed as per instructions in Schedule A  of IPEF.

 

    1. Seminars/ workshops

i.        Amount- Upto Rs 35,000/- per workshop conducted in metros, and upto Rs 25,000/- per workshop conducted in non-metros.

 

ii.     Items –Hiring of premises ,invitation costs, banner &related venue charges in connection with the workshop, refreshments provided,travelling,lodging& boarding expenses for upto a maximum of 2 personnel of Investors’ Associations per workshop conducted by them, honorarium/conveyance to outside speakers, photography expenses, etc to be claimed as per instructions in Schedule A of  IPEF.

 

iii.   Eligibility-All recognized and provisionally recognized Investors’ Associations; NGOs and other groups working in the area of financial literacy/investor education on an event basis.

 

    1. The application for reimbursements from the IPEF shall be made in the specified format as given in Schedule B of IPEF.

 

 

  1. Workshops/seminars conducted under IPEF

a.The applicant shall intimate SEBI about the proposed workshop/seminar, providing details like the venue, speakers, topics covered, target audience, expected audience strength, etc at least fifteen days in advance of the date of the proposed activity.

b.      The schedule shall be disseminated through the SEBI website for knowledge of the investors at large.

c. The advance schedule would also enable participation of SEBI officials in the same, if desired.

d.     The applicants should submit reports on the proceedings of the seminars/workshops conducted by them to the respective regional offices of the SEBI.

 

  1. Periodical reporting by the Investors’ Associations

a.The recognized IAs should submit annual reports detailing their entire operations for the benefit of investors during that year

b.      And any changes in their structure/rules as and when the same are effected.