Investor Issues
CII Capital Market summit has no place for retail investors!

The upcoming meet of Confederation of Indian Industries to discuss ways of expanding and ‘deepening’ the Indian capital markets has no place for the retail investor. Has corporate India written off retail investors? Or do they continue to think that retail investors have nothing to contribute to policy making?

On 12 December, the Confederation of Indian Industries (CII) will hold its 4th Capital Market Summit in Mumbai. A quick look at the agenda and the speakers shows that almost every capital market segment has a role and a space at the summit except the biggest stakeholder of all—the 10 million retail investors.

The theme of the summit is  “Deepening of Capital Markets: Faster Growth of the Economy” and the objective is: Facilitating raising of capital from domestic resources; restore capital markets as the centre for capital formation; and, building stable and mature capital markets. To our mind, all three objectives need to take into account the retail investor. More specifically, it should address why 20 years of economic liberalization and so-called capital market growth has halved the number of retail investor. The most recent survey commissioned by SEBI (Securities and Exchange Board of India) puts the retail investor population at 10 million, which is two million more than that reported by the D Swarup Committee report.

Without the presence of retail investors, markets lack depth and companies find it hard to make successful IPOs.

However, CII is apparently unconcerned. It has put together industry representatives of every kind -- investment bankers, private equity investors, mutual funds, at least four stock market chiefs, regulators, law firms and banks (which hard-sell products to investors) – to deliberate on how to grow the size of the capital market. It is satisfied that if they interact with lawyers, policy makers, investment bankers, advisors and other corporate stakeholders who are helpfully listed under “who should attend”, the summit should be successful.

Is it any surprise then that investors’ fury at repetitive, cumbersome Know Your Customer (KYC) processes are never addressed. It is any surprise that transmission of shares remains a slow, expensive and endless process? And is it any wonder that investors have voted with their feet and switched to bank fixed deposits, gold or real estate or tax-free bonds?

Retail mutual fund investors have also been pulling out of SIPs (systematic investment plans) in large droves. As many as 5.10 lakh SIPs were ceased before the completion of the stipulated tenure (

Here’s the irony—excluding trustee members, there is no direct representative from the mutual fund industry to speak either in the CII summit. In the past, summits of this sort at least had a token representation from investors, investor groups or at least analysts who were seen as the voice of the ordinary investor. But industry has now chosen to dispense even with this pretense.

Keeping retail investors out of capital market summits would have made sense if there were other forums for the regulators to address their concerns or interact with them. But this does not happen either.

The chief guest at CII’s summit is UK Sinha, the chairman of SEBI. In over two years at SEBI, Mr Sinha has diligently addressed a plethora of corporate summits or events organized by industry associations and chambers of commerce, but there is no record of his having addressed any genuine investor meets or directly engaging with investors.

In fact, under his tenure, SEBI does not even respond to investors’ email suggestions; worse even letters from retired secretaries of the government of India are mechanically transferred to the outsourced grievance redressal mechanism which sends out absurd replies like “the issue is not under SEBI’s jurisdiction”. This happened specifically in the case of former expenditure secretary EAS Sarma and has been published by Moneylife.

The bigger irony is that the finance ministry, the ministry of corporate affairs is forever exhorting market intermediaries and stock exchanges to conduct “financial literacy” seminars, as though lack of financial literacy and not bad policy making or mis-selling or regulatory apathy have driven away investors.




4 years ago

Those who want to deepen the capital markets seem to be clueless about how to get the retail investor to invest again.

They are just hoping, retail investors will flock back to the capital markets with rising equity market indices.

The sensex has gone past 19000 but, yet, there are no signs of the retail investor coming back.

We need to remember, Equity also means fair and impartial distribution of wealth - Till that happens, retail investors are not at fault if they prefer to stay away.
Financial literacy and Tax breaks may not be the solution by themselves.

K G Krupal

4 years ago

Backyard plant is not medicine is a proverb in Kannada. We are forgetting our real strength i.e.huge retail base and focusing on few big institutions including FIIs for the market directions. If one thinks of involving huge retail base into the capital market through the registered brokers and Sub-brokers numbering more 80 thousand, our markets will be more strong and stable. By this our country's financial literacy ranking can be improved from the present level of 23 and financial literacy should be improved from present level of 35% to achieve higher ranking. This will yield good long term results. WITHOUT INVOLVING OUR RETAIL BASE NOTHING CAN BE ACHIEVED. THAT IS WHY EVERY foreign institution is looking at India. Better late than never.

Vaibhav Dhoka

4 years ago

Retail investor has absolutely no place in policy making.Retail investor is MEAL for these sharks and moreover during scams,for brokers/mutual funds or corporates.

Government de-recognises Archery Association for age and tenure violations

The President elect of the Archery Association of India, Vijay Kumar Malhotra has served for more than three consecutive terms in the past and is also above the age of 70 years

New Delhi: The Sports Ministry on Friday de-recognised the Archery Association of India (AAI) with immediate effect for "violating the age and tenure guidelines" of the government's Sports Code during its elections last month, reports PTI.
"The Archery Association of India held its elections on 9 November 2012. While the procedures adopted in the elections were in conformity with the procedures laid down in the Sports Code and common practice, the Archery Association has violated the age and tenure restrictions prescribed in the Sports Code," Sports Minister Jitendra Singh told reporters during a press conference here.
"The President elect of the Archery Association of India has served for more than three consecutive terms in the past and is also above the age of 70 years.
"The High Court in its Civil Writ Petition No.195/2010 dated 15.02.2012 and 17.09.2012 had directed that the government shall not grant recognition to the Archery Association of India unless they hold elections as per the Sports Code. In view of the directions of the High Court, the government has no option but to withdraw the recognition of the Archery Association of India," the minister said.
During its elections last month, octogenarian BJP leader Vijay Kumar Malhotra was re-elected as the president of the AAI for the 10th term which means he will retain the position for an unprecedented 40th year, a gross violation of the age and tenure guidelines under the Sports Code.
The Sports Minister has advised the AAI to hold fresh elections for the post of president, in conformity with the Sports Code.
Jitendra has also asked the AAI to amend its constitution to bring it in conformity with the Sports Code and the Olympic Charter.
The Sports Minister said as an impact of the de-recognition, the government will stop funding the AAI with immediate effect.
"Nor will assistance to hold national and regional championships be available. The government is contemplating interim measures, by which athletes are not affected. The government will also open a dialogue with the international body (IOC) to ensure that participation of Indian athletes is not hampered in any way," Jitendra said.
The Sports Ministry's also decided to suspend recognition to the Indian Amateur Boxing Federation (IABF), citing "flawed and faulty elections".
The ministry decided to suspend recognition to IABF after the International Boxing Association provisionally suspended the Indian federation for "possible manipulation" in its recent elections.
The de-recognitions of AAI and IABF by the government came just three days after the International Olympic Committee has suspended Indian Olympic Association for not following the Olympic Charter during its recent elections.


UPA Government wins FDI vote in Rajya Sabha too

The defeat of the motion in the Rajya Sabha came two days after the Lok Sabha voted out a similar motion, paving the way for entry of global supermarkets like Walmart into the country

New Delhi: the United Progressive Alliance (UPA) government on Friday won the approval of Parliament to its controversial decision of allowing foreign direct investment (FDI) in multi-brand retail with a motion against it being defeated convincingly in Rajya Sabha, as Bahujan Samaj Party (BSP) voted in favour of the UPA, reports PTI.
After a animated debate for over two days, 123 members voted against the motion while 109 voted in favour. During the debate, the Opposition attacked the proposal to allow 51% FDI in multi-brand retail, while the government strongly justified it saying it was in the best interest of the country.
Samajwadi Party, which has nine members in the House, staged a walkout expressing dissatisfaction over Commerce Minister Anand Sharma's reply.
The defeat of the motion moved by AIADMK member V Maitreyan in the Rajya Sabha came two days after the Lok Sabha voted out a similar motion, paving the way for entry of global supermarkets like Walmart into the country.
The government's victory in Rajya Sabha, where UPA lacks a majority of its own, came with the help of 15-member BSP, which had walked out of the Lok Sabha during voting on the issue. UPA has 94 members in the Upper House which has an effective strength of 244.
Sachin Tendulkar, nominated member who is playing test match in Kolkata, Murli Deora (Cong), who is unwell, and rebel BJD leader Pyari Mohan Mahapatra were absent.
Replying to the debate, Maitreyan insisted that majority of the House was not in favour of FDI in multi-brand retail.
He said voting did not take place on "merits of the issue, but other considerations...It is a victory of the minority."
Earlier, Sharma maintained that the move was essential for the country's growth and rejected the opposition contention that it would hurt the small retailers and farmers and harm the manufacturing sector.




4 years ago

Close on the heals of this celebrated win of UPAII, the veteran industrialist and statesman Ratan Tata, who could easily be ranked as the first citizen of India’s corporate leadership, has voiced concern of the depleting credibility of governance and sought an ‘irreversible commitment that law of the land has sanctity’. This echoes the concern of every Indian witnessing the molestation of governance at various levels in this country today. The goings on in parliament and in many other legislatures and institutions, the open spats between responsible heads of organisations and institutions on the one side and the government or political leadership on the other, continuous strictures from courts directed against executive and the media reports on unethical and corrupt practices by the rich and the powerful to hold on to the wealth and power, are all agonizing.
Who, when and how the ‘irreversible commitment that law of the land has sanctity’ sought by Ratan Tata is given will decide the course the nation’s further progress will take. The speed with which changes are brought about in the approach to governance and reforms will define the timeframe within which India will be able to come out of the present impasse. Coming out, India will. Present eruptive symptoms show that ‘we, the people’ will not show the patience with which they waited for generations to gain independence, for realizing basic human rights.



In Reply to M G WARRIER 4 years ago

The words of Ayn Rand ring so loud and so true . . .
“when you see that in order to produce, you need to obtain permission from men who produce nothing--when you see that money is flowing to those who deal, not in goods, but in favors--when you see that men get richer by graft and by pull than by work, and your laws don't protect you against them, but protect them against you--when you see corruption being rewarded and honesty becoming a self-sacrifice--you may know that your society is doomed.” - Ayn Rand from Atlas Shrugged

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