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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 Exchange
Falling 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
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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Retail investor protection b.v.raghunandan

  • 1. Retail-Investor Protection -B.V.Raghunandan, SVS College, Bantwal National Conference on Capital Market Sri Bhandarkar’s College, Kundapura December 16-17- 2013
  • 2. 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
  • 3. 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
  • 4. 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
  • 5. SEBI & Primary Market • Sophistication than Access • Mindless Free Pricing (Reliance Power, SKS Microfinance) • IPOs became Wealth Destroyers • Discarding CCI Formula
  • 6. 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
  • 7. SEBI & Stock Exchange Falling 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
  • 8. 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
  • 9. 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