The Hindu Business Line : Doubts loom over MAPIN implementation

EVEN as a committee is re-examining issues relating to MAPIN — a SEBI exercise to fingerprint and grant a unique identification number (UIN) to all market participants — a section of investors is unsure whether they should go in for the identification number now or wait for the committee's recommendations.

The confusion follows market rumours that SEBI (Securities and Exchange Board of India), after the retirement of Mr G.N. Bajpai as Chairman, is not very keen to continue with the massive investor identification programme called MAPIN — the pet project of the former SEBI Chairman.

Immediately after taking over, the current SEBI Chairman, Mr M. Damodaran, extended the deadline for obtaining a UIN till December 2005 and appointed a committee to re-examine MAPIN.

MAPIN has come in for serious criticism from various quarters.

Though the committee's terms of reference do not include the examination of the need for MAPIN, it has been asked to suggest the category of market participants who would need it. Some market participants interpret this as a move either to dilute the coverage of MAPINor to prove that the whole exercise is futile.

While there has been considerable opposition to the implementation of MAPIN, SEBI has so far been steadfast about making it mandatory market wide. Even the new integrated surveillance system that is being developed by SEBI has been designed with MAPIN in view.

So far, it is mandatory for brokers, corporates and their directors to quote their MAPIN number for all trades. The deadline of March 31, 2005 for individual investors to obtain MAPIN for trades above Rs 1 lakh has been postponed to December 31, 2005.

Currently, 1.7 lakh individual investors and over 56,000 corporates have got a MAPIN ID, after paying Rs 300. If MAPIN gets scrapped, there is no clarity on whether they would be reimbursed their money or not. SEBI insiders say MAPIN would be kept as an optional field and those who have availed themselves of the ID can quote the number, rendering the exercise alive but irrelevant.

Considerable amount of investments have gone into the facility so far.

The NSDL (National Securities Depository Ltd) is in charge of MAPIN operations.

Five service providers have been appointed to set up points of sale for MAPIN applicants. These service providers, as well as NSDL, have invested in technology and human resources to manage this exercise. All of this will be wasted if MAPIN is scrapped or rendered irrelevant.

Service providers say they have incurred considerable expenses in setting up investors camps in upcountry locations. This was done to make MAPIN accessible to as many investors as possible.

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