Investor Education and the Training
of Intermediaries

As of March 31, 1997, 8 investor associations across the country were registered with SEBI. Representatives of these associations are members of advisory committees of SEBI on the primary and secondary markets, and are also represented on other important committees set up by SEBI from time to time. These representatives bring to these committees investor perceptions, problems and concerns. Officials of SEBI participated in various workshops, seminars and conferences across the country organised by market participants, investor groups, exchanges and self regulatory organisations, the professional institutes and chambers of commerce and industry to disseminate SEBI's thinking and approach as well as SEBI's objectives, programmes and policies.

In 1996-97, SEBI proposed the introduction of a system of testing and certification of persons working in the securities markets and for those intending to take up employment with securities markets intermediaries. The proposed test, which would be voluntary and could be taken irrespective of age or qualification, is intended to ensure a minimum standard of professional qualification in those who deal with investors in the securities market. The adoption of such a test will improve the quality of intermediation. A committee comprising representatives of SEBI, Institute of Chartered Financial Analysts of India, the UTI Institute of Capital Markets and market participants; assisted by Price Waterhouse LLC has also recommended a syllabus for such a test and the testing procedure. After receiving comments on the Consultative Paper which outlines the syllabus and the testing procedure, SEBI expects to implement the committee's recommendations in 1997-98.

A programme was also organised under the auspices of the Financial Institutions Research and Expansion (FIRE) and the Association of Mutual Funds of India (AMFI) to develop methods for creating a better understanding amongst investors of the characteristics of mutual fund products and to market them more effectively. An extensive training programme has also been commenced by the National Securities Depository Limited (NSDL) for training employees of depository participants in the software that has been developed for use by participants and in the other aspects of depository operations. NSDL also organised investor seminars in different parts of the country to educate investors about the possibilities for reducing delays, risks and costs that they may avail of by dematerialising securities in a depository.