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The Public Accounts Committee (PAC) has come down heavily on SEBI for hasty implementation of market participant identification number (MAPIN) scheme. The Finance Ministry’s contention that there was no loss to SEBI or Central Government does not hold good, the PAC report said.
This is because the Rs 11.54 crore collected from 3.84 lakh investors did not serve the intended objective, PAC said in a report tabled in Parliament on Thursday.
In its action taken notes, the Finance Ministry had responded that there were no malafide intentions in this initiative and the implementation agency National Securities Depository Ltd (NSDL) had done its job by providing registration. However, as the project was abandoned mid-way, the registrations were of no use, the Ministry said.
SEBI had earlier made it compulsory for all individual resident Indian investors, who enter into any securities market transaction of value of Rs 1 lakh or more to obtain MAPIN.
SEBI should do proper advance planning and hold larger consultations with the stakeholders before going ahead with such initiatives, the Parliamentary panel has suggested.
In July 2009, the Comptroller and Auditor General of India had slammed SEBI for awarding the database preparation work related to MAPIN to NSDL, which was registering, servicing and maintaining the database.
An amount of Rs 300 for a registration was collected from around 3.84 lakh investors and given to NSDL. Some of the reasons why MAPIN failed were that it was not cost effective and NSDL lacked reach. Also, the stipulation requiring market participants to give finger print was stoutly opposed, say capital market observers.
MAPIN scheme was mid-way scrapped by SEBI board, which had Finance Ministry representatives.
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