SEBI and Investor Protection-B.V.Raghunandan

5,778 views
5,473 views

Published on

Investor protection measures as presented by B.V.Raghunandan in National Conference on Merchant Banking held at NSS College, Manjeri, Kerala State, India on August 8, 2007

0 Comments
2 Likes
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total views
5,778
On SlideShare
0
From Embeds
0
Number of Embeds
4
Actions
Shares
0
Downloads
226
Comments
0
Likes
2
Embeds 0
No embeds

No notes for slide

SEBI and Investor Protection-B.V.Raghunandan

  1. 1. SEBI and Investor Protection - B.V.Raghunandan, SVS College, Bantwal,Mangalore, Karnataka National Conference on Merchant Banking, NSS College, Manjeri, Calicut, Kerala
  2. 2. The Road Taken <ul><li>Facilitating Establishment of NSE </li></ul><ul><li>Removing Area Restriction for Membership </li></ul><ul><li>Facilitating Establishment of Depositories </li></ul><ul><li>Credit Rating Agencies </li></ul><ul><li>Registration and Regulation of Financial Intermediaries </li></ul><ul><li>Bringing in Healthy Practices in Capital Market </li></ul>
  3. 3. Qualified Institutional Buyers <ul><li>Against the Interest of Retail Investors </li></ul><ul><li>Prevents wider holding </li></ul><ul><li>Facilitates Manipulation </li></ul><ul><li>Prevents Perfection of Capital Markets </li></ul><ul><li>Favouritism Shown to QIBs </li></ul><ul><li>Increases the QIB and Merchant Banker Nexus </li></ul>
  4. 4. IPOs and Adequate Disclosure <ul><li>High Quantity of Information </li></ul><ul><li>Vetting the Prospectus Difficult </li></ul><ul><li>Onus Shifted to Merchant Banker </li></ul><ul><li>Prospectus Became Bulky </li></ul><ul><li>Application Cum Prospectus </li></ul><ul><li>Prospectus Portion Unreadable </li></ul>
  5. 5. Free Pricing of IPOs <ul><li>Hefty Premium </li></ul><ul><li>Players with Grip on the Market Exploit it </li></ul><ul><li>QIBs Withdraw at the Last Minute </li></ul><ul><li>No longer IPOs are Sure Winners </li></ul><ul><li>Need for Merchant Banker to Maintain Price </li></ul><ul><li>Listing at a Discount to Issue Price </li></ul>
  6. 6. Financial Reporting <ul><li>Bulky Annual Reports </li></ul><ul><li>A Shareholder Having a Single Share entitled to the Report </li></ul><ul><li>Quarterly Reporting without Audit </li></ul><ul><li>Quarterly Reporting with Limited Audit Review </li></ul><ul><li>Quarterly Revenue Guidance </li></ul><ul><li>Annual Revenue Guidance </li></ul><ul><li>Finally, Corporates Need not Send the Annual Report </li></ul><ul><li>Need to Send only on Request </li></ul>
  7. 7. Insider Trading <ul><li>Lesser Cases of Detection </li></ul><ul><li>Disproportionate Quantum of Punishment </li></ul><ul><li>Penalty and Denial of Access to capital Market </li></ul><ul><li>SEBI’s Orders Reversed by SAT </li></ul>
  8. 8. Derivatives <ul><li>More Retail Participation </li></ul><ul><li>Dominant Futures Market </li></ul><ul><li>Insignificant Cash Market </li></ul><ul><li>Short-Term Perspective </li></ul><ul><li>Neither Hedging nor Risk Management </li></ul><ul><li>Pure Speculation </li></ul>
  9. 9. Rating of IPOs of Equity Shares <ul><li>Difficulty of Equity Valuation </li></ul><ul><li>Hence, Not Done Anywhere </li></ul><ul><li>Over-Enthusiasm </li></ul><ul><li>Misleading the Investors </li></ul><ul><li>More Shopping Efforts for Rating by Corporates </li></ul>
  10. 10. “ The financial markets that we have constructed are now so complex, and the speed of transactions so fast, that apparently isolated actions and even minor events can have catastrophic consequences” -Richard Bookstabar in ‘A Demon of our Own Design’
  11. 11. THANK YOU

×