Capital market regulator SEBI today said the equity market should not be considered as a market of speculators.”Don’t treat the capital market as a market of speculators,” Securities and Exchange Board of India (SEBI) Chairman U K Sinha said at a conference.
Stressing on the importance of removing bottlenecks from the system, Sinha said that procedures must be simplified to increase retail participation.
“If you look at the IPO process, the prospectus are huge, and in fine print. We will simplify the IPO form. The group has started working and it won’t take too much time,” he said.
He said that the retail participation accounts for 8 per cent of the total funds in the equity market, while in China, South Korea and Brazil, participation from the retail side was 20-30 per cent.
Sinha added that the regulator had become tech-savvy and is in the process of setting up a world-class facility for surveillance of activities in the capital market.
He said that savings money has to be converted into investment for the economy to grow in a fruitful manner.
He added that pension fund amounts should be allowed to be invested in equities and would help the capital market get 1.5 per cent more funds if 15 per cent of the pension fund money was invested in the capital market.
“Don’t consider…” “should not be considered …..” are the key words. One is not at all clear as to what really was the purport of his message or entreaty , whichever way one looks at it; or to whom addressed. Be that as it may, it is a cetrtainty that the tax gatherer is not going to fall a prey to it or lend his ears but stick to his ‘rules book’ , at times even may travel outside it, to ‘consider’ the referred transactions , to the best of his powers / extent permissible, as colored with the quality of ‘speculation’. May be, according to an impassionate or impartial view, he can not be rightly considered as not justifified in his doing so. For,a puritan would say that, the line of distinction or demarkation between -‘speculative..’ and ‘non-speculative…’ is too thin to be amenable to a holistically ‘objective view’.