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The book is an attempt to translate Keynes’s ideas for another chaotic era

John Maynard...

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Neither Shaken Nor Stirred

These eight equity diversified schemes have yielded positive annual returns since their...

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Stock exchanges to soon launch options in currency derivatives

Kochi: Stock exchanges in the country will be launching options in currency derivatives very soon, reports PTI quoting Securities and Exchange Board of India (SEBI) chairman, C B Bhave.

The Reserve Bank of India (RBI) and SEBI have given in principle clearance to launch options in currency derivatives, Mr Bhave said.

'Exchanges have applied to us and we are expecting to take a decision on actually allowing exchanges to launch options in currency derivatives very soon', Mr Bhave said addressing a seminar on 'Investor Protection and Market Development' here.

Introduction of currency derivatives in stock exchanges was a subject pending for long. 'We were able to evolve a joint regulatory mechanism. We will go step by step. Initially futures was introduced, then rupee-dollar, rupee-pound and rupee-euro was introduced', he said.

On the mutual fund industry, he said it was undergoing 'tremendous transformation'. The entry load ban was introduced from 1 August 2009 to 21 July 2010. 'Everyone talks of the Rs10,000 crore erosion during the entry load ban', he said.

The SEBI chairman said Rs63,000 crore was collected by the mutual fund industry during this period. The truth is some of the distributors have adjusted to the new environment. The mutual fund industry on its own cannot collect Rs63,000 crore in equity in existing schemes. The asset management company (AMC) needs to adjust to this and make efforts.

The profits of the AMCs put together had gone up by three times during 2009-10 compared to 2008-09. The profits of AMCs which were Rs243 crore in 2008-09, touched Rs870 crore in 2009-10. This was an opportunity for AMCs to adjust to the new environment, he said.

Some AMCs are training their personnel to adjust to the new environment, some are not, he said, adding unfortunately some wasted lot of time trying to scuttle this move.

The investors have Rs1,200 crore extra in the hands in one year when the industry is saying their collections are down.

In earlier years, money used to be collected in newly launched schemes, now money is being collected in existing schemes, he said, adding existing schemes are gathering weight compared to new schemes. So new schemes launches have come down.

In retail applications, 18%-20% persons apply through application Supported by Blocked Amount (ASBA). This percentage will increase and there is need for investor education in this area. We are talking to merchant bankers on the glitches in the system. We need to improve.

'We want to collect sufficient data on ASBA to see how much money investors have saved by way of interest', he said.

In the IPO scam, SEBI could recover Rs28 crore from intermediaries and entities those who had unlawfully made and it was restored to the investors.

SEBI is conscious that lot more can be done and would continue to keep its 'eyes and ears open'.

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