The Securities and Exchange Board of India (SEBI) is keen on finding long-term systemic solutions to certain common recurring complaints from investors, rather than handing out off-the-shelf case-by-case directive-based resolution of individual grievances.
Indicating this at a function, to launch the tie-up between Madras Stock Exchange (MSE) and the National Stock Exchange (NSE) here on Thursday, C.B. Bhave, Chairman, SEBI, said the changing market environment had indeed thrown up new issues. These possibly required to be looked at from a systemic angle for a solution, he added.
In this context, he pointed to three specific instances where the regulator had been receiving recurring complaints from the investors. One related to the power of attorney given by an investor to a broker. More often than not, investors singed the power of attorney without bothering to give it a thorough reading, he regretted. The regulator, Mr. Bhave said, had circulated a discussion paper on this issue. Based on the feedback, he would take the proposal to the board of the SEBI for a decision, he added. The second issue pertained to complaints related to non-refund or delayed refund of money on un-allotted shares post-public issue. This required to be looked at from a systemic point of view, he said. This also called for a lot of back-end work at the bank level on the technological front and tremendous amount of interface among multiple agencies, he said. The regulator, he said, was also looking at another area. It related to the maintenance of running accounts by investors with the brokers. Stating that SEBI had seen an increase in the number of complaints on this front, Mr. Bhave said the regulator obviously could not ask the investors not to keep running accounts with the brokers. While advising investors to take precaution before doing any such thing, he said SEBI would be looking at a systemic resolution of this issue. ``It is still at a thinking stage,'' he said.
In these contexts, he lauded the investor education initiative of the MSE. ``The stock exchanges have an important role to play,'' he added. The investor education initiative could sometime run counter to the brokers' interest, he pointed out. ``Without investors, however, we (regulator, brokers, stock exchanges and other intermediaries) have no chance of existence, `` he pointed out.
While presenting the road map for MSE, its Director, S. Vekateshwaran said the tie up with NSE would help the MSE brokers to trade on the NSE platform by issuing MSE contracts. Ten MSE-listed companies could now trade on the NSE platform. This number would go up in the coming days, he said. He also said efforts were under way at MSE to set up its own trading terminal for MSE-listed companies. This would go a long way in helping the SMEs (small and medium enterprises) raise capital from the marketplace, he added. Earlier, Ravi Narain, Managing Director and Chief Executive Officer of NSE, said the alliance with MSE would help to reach out to smaller regions and companies.
