In order to protect the larger interest of small and medium investors, the investors associations should re-invent their roles, said Sebi chairman UK Sinha on Friday. The regulator will help as a willing partner to such associations to re-invent their roles, he said.
Addressing the silver jubilee function of Tamilnadu Investors’ Association (TIA), Sinha said, “I would recommend the associations’ need to re-invent themselves and their roles in the regulator’s scheme of things in a larger perspective.” There are 18 investor associations recognised by Sebi, he added.
Appreciating the role of some shareholder groups in the country, Sinha said the regulator has huge expectations from the investor associations but sadly their role has been going down over a period of time.
“As a market regulator, we have been holding consultations at both national and regional levels to find out number of issues where the associations are not active,” he pointed out.
Urging investor groups to play an active role in governance matters of listed firms, Sebi said AGMs are no more ‘chai-samosa’ parties and shareholder activism globally has forced even CEOs to resign at one-fourth of the world’s 500 biggest companies. Quoting the World Bank report of October 2014, he said though the ease of doing business in India was not encouraging, the report made a satisfactory point on shareholder protection. The rank on shareholder protection has gone up from 49 in 2012 to 3 in 2013 to 7 in 2014.
On ponzy schemes, he said Sebi had passed orders against 250 companies in past two years and collected huge sum.
BSE managing director and CEO Ashish Kumar Chauhan said the distribution of government bonds through the stock exchanges would not only help address price volatility in the markets, but will also attract more retail investors. By doing so, the public investment into the stock markets will go from current 2% to 20 over next 20 years.
“We have taken up the issue with regulators such as Sebi and RBI seeking their consent. Once it happens we can also do auctions, by which an investor can buy government bonds in primary, as well as secondary market always,” he added.