Investor Education enters a new dimension
Mar 15, 2011

Author: PersonalFN Content & Research Team

Do you know how our capital market functions?

How SEBI regulates the financial markets?

Are you completely aware of the positives and negatives while investing stocks, mutual funds or any financial instruments?

If your answer is a big “NO” then just relax, your school going kid will explain it to you. Yes exactly, your school going kid!!

You may ask how is it possible? Well, to promote investor education and in order to take it to a new dimension, the Securities and Exchange Board of India (SEBI) will now invite students of schools (of class IXth standard and above), college and professional institutes to its headquarters (in Mumbai) and educate them about the capital markets, its (SEBI’s) role as a regulator and also have an interactive session whereby numerous questions from the participants would be answered.

And that’s not it! SEBI is also planning to conduct annual examinations to test their (student’s) financial knowledge. Students with good scores will be awarded by SEBI at special functions.

Our View

We believe that SEBI has taken a very good initiative in educating students right from their early age. This will thus help in making students aware of the capital markets and how it functions. This initiative will also go a long way in molding future of our country.

Also, according to the demographics India’s working-age population will see a growth of 17.4% during the period of 2010-2020.

Hence, imparting education to such a huge potent force (young population) will definitely prove beneficial for India and sustain long term growth.

However, one should keep in mind that a high young population will also raise demand for infrastructure and healthcare facilities which are already constrained. Thus, the Government should fuel infrastructure growth and make way for better and cheaper medical facilities to all.

Also, in our opinion financial planning education should be imparted to young students as this exercise (of financial planning wherein your age, income, nearness to goal, etc.) is very important before allocating investments to various asset classes. Thus imparting such financial planning education will make our next gen investors smart enough not to be fooled by any agent, advisor or a distributor.

In all we feel SEBI’s initiative is worth imitating!!