The Telegraph
Since 1st March, 1999
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Sebi keeps faith in small investors

Mumbai, May 7: All’s well with the Indian capital market, feels Sebi chairman G. N. Bajpai who is wooing small investors back to the markets by vigorously benchmarking Indian capital markets to the best in the world.

Bajpai seems to have a store of data to prove that small investors are cautiously finding their way back to the market. However, facts available with the bourses hardly support such optimism.

“Disappearance (of small investors) is always sudden, but their coming back is always slow. Moreover, our markets cannot remain insulated from global markets,” Bajpai said at a luncheon meeting with the press.

However, the strict norms in the market now allow only the right people to access fresh capital from the primary market.

The success of initial public offers (IPOs) by public sector banks gives credence to this belief, he said. He cited the example of Union Bank of India’s (UBI) initial offer that attracted 3.5 lakh applicants.

What was more impressive in this case was that the 1.45 lakh successful applicants appeared to be new entrants as they simultaneously opened new D-Mat accounts to deposit their shares.

Moreover, the regulator has come down heavily on market offenders. During the year, Sebi has passed 561 orders and directions from the chairman. Of these penal actions were 393 and directions were 168.

Bajpai said out of the 105 activities listed in the Strategic Action Plan 2002-03, 67 have been completed, 13 are on-going and 25 are in various stages of completion.

The shortening of settlement cycles to T+3 (three days) from the earlier T+5 (five) was also a major accomplishment, he said.

“We have adopted a three-pronged approach,” Bajpai said. First, highly ambitious investor awareness programmes were launched by Prime Minister Atal Bihari Vajpayee.

Secondly, systemic risks in the market were brought down. The regulator has also introduced a multiplicity of products to cater to every need of the investor. He was referring to some derivative products, bonds and G-Secs launched recently.

To curb illegal trading, the regulator has sought the intervention of the state governments.

“This (illegal trade) is an unofficial activity beyond the ambit of the market regulator and we have written to state chief ministers to deal with it,” Bajpai added.

Sebi sent teams to various cities to check such occurrences.

Recently, Sebi superseded the Ahmedabad stock exchange board when it found illegal trading activity being conducted on the bourse.

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