Despite the plethora of securities fraud cases that have popped up recently, there is still hope for investors. Investor protection laws are being developed in order to protect investors from falling victim to the pitfalls of the stock market. Fortunately, there are several different ways to get involved in the market. Here are three options. All of them offer a variety of benefits to investors. Listed below are some of the most common protections.
NSAA – North American Securities Administrators Association was founded in 1919. It is the oldest international organization dedicated to protecting investors. The association represents 50 state securities agencies. Its mission is to promote efficient capital formation, enhance investor protection, and foster investor education and research. Its membership includes senior officials of the Exchange. There are many ways to become a member. The following are some examples of investor protection policies in place throughout the U.S.
NSDL – The National Stock Exchange of India, or NSDL, is the primary regulator of the stock market in India. It regulates the issue of stocks and other securities, and also provides grievance redressal mechanisms. In addition, the exchanges maintain investor protection funds. And if any investor is harmed by a company’s negligence, the depository will indemnify the investor. To protect investors, the SEBI is taking several steps to ensure fair and consistent markets.
SIPC – In addition to SIDL, many brokers offer additional coverage through a private carrier. This is known as excess SIPC insurance and the coverage limits are usually high – $100 million per account! This insurance reimburses investors in the event of a broker or dealer failure. However, the limits of excess SIPC insurance differ from one firm to another. It is essential to research the insurance limits of all brokers. These limits can help protect investors.
Arbitration – Under the new SOPs, investors can file a dispute with an RTA if they feel the company has not met their obligations to them. This arbitration will be conducted by a panel of three arbitrators, and the stock exchange must complete the process within 30 days. Disputes can involve issues related to investor services, including the transfer/transmission of shares, the demat, and transposition of owners. Disputes over dividends, property rights, and credit of publicly-issued securities may also be arbitrated.
MiFID II – A new European regulatory framework aimed at protecting investors from fraud and abuse. The regulation introduces new obligations on distributors and manufacturers, and increases transparency in the context of paid advice. The regulation strengthens the role of the management body and provides additional organisational requirements to investment firms. In addition, the law provides more protection for investors and the role of entrepreneurs. It should not be confused with a single policy or regulation governing the stock market.
