Retail-Investor Protection -B.V.Raghunandan, SVS College, Bantwal National Conference on Capital Market Sri Bhandarkar’s College, Kundapura December 16-17- 2013
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Retail-Investor Protection-B.V.Raghunandan, SVS College, Bantwal
National Conference on Capital Market
Sri Bhandarkar’s College, Kundapura
December 16-17- 2013
Organised Market & Retail Investor• Retail Investor is a basic
requirement of an organised market
• More important for securities market than foreign exchange or commodities exchange where trade creates independent demand
• Contrarian opinion for a Stable Market
• A Naturally Ready Market• Retains Long Term concept of
investment in equity shares
Market Perfection
• Regulator’s Intervention• Market Intervention• Diffused Opinions • Heterogeneous Action
• Encompassing All the Stocks• Performance of the Companies
• Stable Prices• Retail Investor, the Focus
Requirement to Retain Retail Investors
• Stable Regulations• Simplicity of Regulations• Focus on Investor & Not
Technology• No Plagiarism of Western
Models• Institutions Secondary• Profitability of FIs• KYC Contradiction• Active Primary Market• Democratic Set-Up
SEBI & Primary Market
• Sophistication than Access• Mindless Free Pricing (Reliance
Power, SKS Microfinance)• IPOs became Wealth
Destroyers• Discarding CCI Formula
SEBI & Financial Intermediaries
• Over-regulation• Ever-Changing & High Volume Rules• Should Save its Time in Identifying Market Manipulators• Rendering their Business Unprofitable• Closure of Many FIs including Corporate Stock Brokerage
SEBI & Stock ExchangeFalling Retail Participation
Year Percentage of Retail as a Percentage of Total Sales
2013 34.31
2012 47.29
2011 47.75
2010 56.21
2009 65.30
2008 55.66
2007 55.51
2006 67.20
2005 73.83
2004 75.46
2003 83.58
Source: BSE & Brokerage Websites
Imperfections of Stock Market• Circular Trading• Day Trading• Role of Analysts• Domination of Institutions• Media’s Hype• Role of FIIs• Too Much of Global Cues• Technical Analysis• Favourite Games• Fluctuations
Agenda for Reversal• Intense Stockwatch• Banning Free Pricing of IPO (Related to Book Value)• Study of Viability of Fis• Workable KYC Norms• No Quarterly Financial Reporting• Limited Financial Reporting sent in Hard Copy• IPOs by Firm Price Offer• Offer for Sale also by Firm Price Offer• Stopping Revenue Guidance• Banning Technical Analysis
THANK YOU
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