To minimise risk associated with direct stock investment for new investors, market regulator SEBI has asked the government to route the tax-saving Rajiv Gandhi Equity Savings Scheme through mutual fund (MF).
Chairman of Securities and Exchange Board of India (Sebi) U. K. Sinha, on Saturday, said the regulator had submitted a proposal in this regard to the Finance Ministry.
“The thinking in SEBI is that first time investors may not have adequate information about the stock market...they should enter the market through institutional investor,” Mr. Sinha said.
“...is it right to expose an uninformed investor directly into the equity market or provide him access through mutual fund (MF),” he said.
He was responding to queries on RESS announced by Finance Minister Pranab Mukherjee in his budget speech.
Keywords: Rajiv Gandhi Equity Savings Scheme, SEBI, mutual funds
Mutual Funds are not saint either and have wasteful & high expenses and
manipulative strategies. If RESS is to allow investment via Mutual
Funds, specified schemes of MFs must be exclusive for such small
investors without allowing any corporate / major investor.
The GFC is a great example of regulators taking the advice of
independant advisors with vested commercial interests. According to
some viewponts which i subscribe to, many of the independant advisors
were professors and economists with a long history of patronage from
the private finance sector.Lets be cautious about any recommendations that increases the scope for profit by the finance sector.
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