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«3-4 FEBRUARY 2012 GOA, INDIA For further information, please contact: Andrea Grifoni, Policy Analyst [Tel: +33 1 45 24 83 53; Email: ...»

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3-4 FEBRUARY 2012


For further information, please contact:

Andrea Grifoni, Policy Analyst [Tel: +33 1 45 24 83 53;

Email: andrea.grifoni@oecd.org].


The SEBI-OECD International Conference on Investor Education “Towards a more Inclusive and Secure Financial World” was held in Goa, India 3-4 February 2012. It was co-organised by the Organisation for Economic Co-operation and Development (OECD) and Securities and Exchange Board of India (SEBI) with the support of the Government of Japan. The event was held at Marriott Resort Goa, in Panaji, capital of the State of Goa.

An international audience of almost 200 experts from 45 countries attended the event, including high-level officials and experts from securities commissions, ministries of finance, central banks, regulatory and supervisory authorities, officials of State governments, private sector, academic and civil community from OECD countries and non-OECD members’ economies (including 3 additional Key Partners: Brazil, China/Hong Kong and South Africa) – see attached list of participants -. Participation from India was very high, with representatives from the Federal Government, branches of SEBI, stock exchanges, NGOs and supervisory authorities (insurance and pensions).

The two-day conference opened with the welcoming and inaugural addresses of three eminent speakers: SEBI Chairman Mr. Upendra Kumar Sinha, OECD Deputy-Secretary General Mr. Richard Boucher, SEBI Whole Time Member Mr. Prashant Saran. SEBI Whole Time Member Mr. Rajeev Kumar Agarwal gave the vote of thanks. Mr. Pranab Mukherjee, Honourable Finance Minister, Government of India, unfortunately could not attend the event as planned, due to local elections, but addressed the conference participants with a formal message read by the master of ceremonies.

The programme of the conference (attached) allowed the discussion of the rationale for investor education initiatives, of the main actors involved, such as financial regulators and the private sector, and of the role of these initiatives within broader national strategies for financial education. The conference also focused on specific aspects of programme implementation: a panel of academics discuss behavioural and emotional biases which should be taken into account to design efficient programmes; and two parallel workshops dealt with delivery to specific target groups and innovative delivery tools.

Presentations and speeches are available on the seminar dedicated website.

Message of Mr. Pranab Mukherjee, Honourable Finance Minister, Government of India The Honourable Finance Minister was unable to deliver his special address as planned but sent an official message to the conference.

In his message, he noted that the global financial crisis highlighted, inter alia, the risks posed by complex financial products sold without the necessary suitability and appropriateness tests and notably underscored the importance of investor education and empowerment. The Government of India has accordingly implemented a market-based system for the classification of financial instruments based on their complexity and risks.

The Government, he continued, has further combined these efforts with an inclusive approach aimed at better tapping the domestic sources of savings to provide a better future to Indian citizens. SEBI in particular, he noted, has put in place several initiatives in the framework of investor education: the establishment of the Investor Protection and Education Fund (IPEF), the programmes conducted through the National Institute of Securities Markets are just two examples of such an impressive work.

The Finance Minister stressed that the National Council of Applied Economic Research found a substantial growth of the investor population in the past ten years which is notably the result of effective investor education programmes and activities conducted by public authorities, in collaboration with other stakeholders. The Finance Minister concluded his message wishing all successes for the Conference, stating that its outcomes would certainly provide further inputs to policymaking not just in India but globally.

Opening remarks

Mr. Prashant Saran, Whole Time Member, SEBI, opened the conference thanking the OECD and Deputy Secretary-General Richard Boucher, conveying the satisfaction of both organisations for the presence of representatives from 45 countries that gathered in Goa to discuss an important topic like investor education. The theme of the conference is very appropriate for a country like India, he noted, where strong and sustained economic growth needs to come in parallel to the development of inclusive and secure financial markets. To this effect, Mr. Saran stressed the importance of education as the demand component, and as a complement, to government-led supply side financial inclusion policies.

Mr. Richard Boucher, Deputy Secretary-General of the OECD, thanked SEBI for the joint organisation of the first high-level international meeting on investor education, which he defined as a milestone in the collaboration between the two organisations. Policy makers globally, as testified by actions at G20 level, recognise today the importance of three policy dimensions in order for individuals to evaluate and fully benefit from the opportunities offered by financial services: inclusion, protection and education. Within the realm of education, he called for increased attention to investor education, in a moment in which societies and economies need stronger financial markets that can channel critical resources efficiently and support the development of the real economy. This would also help renewing consumer confidence by ensuring a safe saving and investment environment for private investors, and for new investors in particular. Mr. Boucher concluded describing the informative agenda for the two days and the questions that would be addressed, pointing out that the work of the OECD and of its International Network on Financial Education (INFE) and its over 90 member countries could help meeting these challenges.

Mr. Upendra Kumar Sinha, Chairman of SEBI, thanked Deputy Secretary-General Boucher and the OECD for the excellent collaboration leading to this joint event, the first of his kind where policy-makers and securities commissions’ representatives from 45 countries joined forces to answer such important and to some extent new challenges. Mr. Sinha noted that financial consumer protection and financial education are increasingly recognised as key aspects of efficient financial markets, but that investor education as such is a relatively new endeavour. However, events like the SEBI-OECD conference show that investor education is set to become part of the statutory responsibilities of regulators worldwide. He then addressed specifically the case of India and its national strategy for financial education, within which SEBI leads work on investor education and the four regulators work collectively through an established committee. Mr Sinha concluded explaining the activities of SEBI in investor education, in particular the creation of the National Institute of Securities Market and their initiatives in schools, and concluded with the hope that the deliberations of the conference would help inform India’s national strategy in the coming years.

Before the official opening of the conference, Mr. Rajeev Agarwal, Whole Time Member, SEBI, offered the vote of thanks to the representatives from 45 countries and to the high-level personalities that with their presence would contribute to the success of the conference deliberations.

Session I: Setting the policy framework for investor education

The session, moderated by Mr. André Laboul, Head of the OECD Financial Affairs Division and Chair of the OECD International Network on Financial Education (INFE), addressed the rationale for the development of investor education initiatives, focusing notably on the need to widen access to financial markets in emerging economies, to enhance households’ trust in financial markets, and to strengthen savings for retirement and investing.

Mr. Ananta Barua, Executive Director, SEBI, India, presented the reasons driving the Indian Strategic Action Plan for investor education, among which the increasing participation of retail investors in initial public offerings (IPOs), the inadequate social security and retirement benefits for parts of the population, and the increasing sophistication of products made available to Indian investors. He explained that in order to convert Indians from savers to investors, the provision of information is not sufficient and a more structured investor outreach programme is needed. Mr. Barua gave concrete examples of such an approach presenting SEBI’s investor education activities, focusing notably on content development and delivery channels.

Ms. Lori Schock, Director Investor Education, Securities and Exchange Commission (SEC), United States, began stressing the shift of financial responsibilities from governments to individuals, notably regarding the need to ensure sufficient retirement income. In this framework, she explained how the SEC serves investors by answering questions, handling complaints and educating the public. Educating investors is in her views one of the best defences against frauds, as it helps informing the regulatory actions of the regulator. More specifically, she presented how complaints data shape policy responses and help targeting enforcement resources. Ms. Schock concluded underlining the strong role of the regulator, which by actively engaging in investor education can set an example and co-opt other important stakeholders from the private sector in pursuing such initiatives.

Mr. Mustafa Gumus, Deputy Head, Capital Markets Board, Turkey, put the need to increase savings and investments in Turkey in a macroeconomic framework, stressing the positive association between rising levels of savings and investments and economic growth; he also explained the main characteristics of the Turkish financial market and the country consumption patterns. In this context, investor education is deemed necessary both for the general economy and in order to assist individuals in different moments of their lives. Mr. Gumus presented the results of a capital market awareness and knowledge survey conducted on different target groups within the country, showing how the outcome of the study informed some specific investor education initiatives within the framework of the country’s national strategy on financial education. He concluded his intervention detailing some relevant programmes implemented by the Capital Markets Board.

Mr. José Alexandre Cavalcanti Vasco, Head of the Investor Assistance & Education Department, Comissão de Valores Mobiliários (CVM), Brazil, introduced the changes in income distribution that brought 50 more million Brazilians into the middle classes as one of the main drivers for investor education policies. These new investors display low levels of financial literacy and need, together with sound rulemaking and enforcement, tailored investor education programmes to allow them to access financial markets with an appropriate investor protection framework. Mr. Cavalcanti then described selected programmes implemented by CVM and how they fit in the country’s national strategy on financial education. He concluded portraying the two main challenges ahead: better integration of investor education in the Brazilian national strategy, and achieving behavioural change, drawing on lessons learnt from the financial education school programme already implemented in six states.

Ms. Sue Lewis, Stl Consultants, United Kingdom, intervened as a discussant on the panel. She presented the OECD Savings and Investments project, its rationale and main findings, addressing notably barriers to saving and investing and the policy levers that can be used to help individuals. Providing comments on the previous presentations, she stressed notably that more attention is needed to the impact of precautionary savings, whereby people might tend to save excessively in reaction to the instability created by the crisis) and as such refrain from investing.

The questions and answers (Q&A) that followed was very lively and addressed key issues such as the budget percentage allocated to investor education activities by the securities commissions in the audience, the difference in the policy treatment of savings and investments, and their definitions according to different countries. The discussion also touched upon the diverse mandates of regulators, their potential role in promoting capital formation and their effects in changing the investment culture of the population.

Session II: An educated investor is a better protected consumer

The session, moderated by Mr. Prashant Saran, Whole Time Member, SEBI, focused on the complementarities between investor education and consumer protection, and addressed in particular the role of regulators. The discussion centred on integrating investor education in the financial landscape in order to rebuild consumers’ trust, allow investors to interact fruitfully with financial institutions and intermediaries and better understand the regulatory system.

Mr. Gary Tidwell, Senior Advisor, International Organization of Securities Commissions (IOSCO), introduced IOSCO and its membership, noting that among IOSCO’s Principles of Securities Regulation, one addresses specifically the responsibility of regulators in the education of investors and other market participants. Both IOSCO’s technical and Emerging Market committees analysed investor education activities among membership, discovering four approaches: statutory obligation to undertake it, presence of a separate government entity that has responsibility, engagement in investor education as part of the investor protection charters, and finally no specific activities undertaken but investor education enhanced through other regulatory policies. Mr. Tidwell also noted how investor education has risen in the topics that securities regulators qualify as “very interesting” in an internal survey (scoring 61%). This typically demonstrates the relevance of the issue.

Mr. Yoshitaka Sakai, Deputy Director for Research and Policy, Financial Services Agency (FSA), Japan, introduced the role of the Japanese FSA, the single financial regulator with responsibility for banking, insurance and securities. He explained that among the three mandates of the JFSA is the protection of depositors, insurance policy holders and investors and how within this framework JFSA promotes market participation of retail investors and acts to enhance their financial literacy. Mr. Sakai presented the 2007 Plan for Strengthening the Competitiveness of Japan's Financial and Capital Market, addressing notably the financial and investor education provisions it includes. He concluded focusing on examples of specific programmes aimed at different target groups selected according to a life-cycle approach, and portraying the legislations and regulations that protect investors in the country.

Ms. Sujatha Sekhar Naik, Deputy General Manager & Head Investor Affairs & Complaints, Securities Commission (SC), Malaysia, began by noting that if traditional tools of market discipline, among which disclosure, corporate governance and risk management, have failed investors during the crisis, private investors are also partly to blame. In a continuously evolving market, she explained, a sound regulatory framework might not be sufficient: for this reason investor education should be embedded across all regulatory functions, such as development and roll−out of new products. Mr. Naik stressed that such approach should impact on all phases of interactions between investors and financial providers: pre−sale, point of sale and post-sale. She closed providing interesting concrete examples of SC’s investor education strategy and its focus areas, notably sales practices, disclosure and know-your-customer provisions, and portraying their beneficial impact on investors’ behaviours in the Malaysian market.

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