Investment is something in which a person put some money in some kind of business, property r any precious asset with the hope they would receive it back with the increased return. People invest money all the time in different forms of investment. When you buy a property gold, some company shares you are actually investing your money when you ‘re hoping that on sailing them after some time you will get back your invested and additional money. If the investment is done wisely then the return is always good and even a single a single mistake can make you lose all of your investment money. This is why people are so afraid of making an investment. We hear about frauds and all types of investment losses that we have to think hundreds of time before making an investment decision. To avoid that kind of frauds and losses in the investment business, investor protection has been started.
What is Investor Protection?
Investor protection is an action the purpose of which is to protect any kind of fraud and honest advertising of financial products to make sure that investor won’t lose any of the investment money if their money is left unpaid. As the name indicates investor protections is to protect the rights of the investor on its money and to make sure that investors would not have to go through any fraud. Without this action, investors were at the greater risk of losing all of their money and were likely to go through different frauds.
Investment protection is defined by the extent with which the company is protecting the investor from the insider’s expropriation. Investor protection gives investors of that company security and protects them from frauds and brokers and other such things by which investor might have to suffer.
What the investor protection doesn’t save you from is the thing the kind of loss you have to go through if the value of the product you have invested in a decrease in value or loses its value. Because if such thing happens then the company has to suffer the loss too and there in no guarantee of that kind of loss so if it happens then investor had to suffer too but at least they are safe from any kind of fraud and broker. Investor protection focuses on the fact that the investors are informed all about the purchases and all of the insider activity where the investor has invested in.
Investor protection act
Investor protection act was introduced in 2009 ad according to this act a reward is promised for reporting any kind of financial fraud, any responsibility of supporting in such thing. This act was established due to the financial crisis that appeared due to frauds in 2008_2009 and to avoid this type of crisis in future this act was started.
This investor protection was started to save the investors all over which are investing their money in different companies and corporates from losing all of their money due to some fraud or inside broker.