Reliance Mutual Fund new issue closes 22nd November
Reliance Mutual Fund has launched Reliance Fixed Horizon Fund-XXI-Series 25, a close-ended income scheme.
The investment objective of the scheme is to generate returns and growth of capital by investing in a diversified portfolio of central and state government securities and other fixed income/debt securities maturing on or before the date of maturity of the scheme with the objective of limiting interest rate volatility. The tenure of the scheme is 552 days.
The new fund offer closes on 22 November 2011. The minimum investment amount is Rs5,000.
CRISIL Short Term Bond Fund Index is the benchmark index. Amit Tripathi is the fund manager.
SBI Mutual Fund new issue close on 18th November
SBI Mutual Fund has launched, SBI Debt Fund Series 367 Days 10, a close-ended income scheme.
The investment objective of the scheme is to provide regular income, liquidity and returns to the investors through investments in a portfolio comprising of debt instruments such as government securities, PSU & corporate bonds and money market instruments maturing on or before the maturity of the scheme. The tenure of the scheme is 367 days.
The new fund offer closes on 18 November 2011. The minimum investment amount is Rs5,000.
CRISIL Short Term Bond Fund Index is the benchmark index. Rajeev Radhakrishnan is the fund manager.
Siddharth Shah, the newly elected chairman of BSE Brokers’ Forum (BBF) speaks with Jason Monteiro of Moneylife about issues of declining retail participation in the capital market and steps need to get common investors back
Moneylife (ML): The BBF is a platform where brokers can voice their concerns. What are the current issues faced by brokers?
Siddarth Shah (SS): Declining retail participation in the capital markets is the biggest concern for all brokers. Since the last 15 years, the Forum has seen many reforms but nothing has evolved so far from the policy makers for increasing participation from retail investors. Over the past three years the number of demat accounts has remained more or less the same. There has been no growth.
Reforms happen for the benefit of people but we regret that there have not been many efforts for increasing retail participation. Like in the case of equity mutual funds, here also there is a negative growth.
Due to high volatility, investors are confused. Earlier investors used to participate in the market irrespective of the rising or falling, but now there is no participation.
This is one of the main priorities of the BBF to address the issue of retail participation.
ML: How can this issue of low retail participation be addressed?
SS: The market is not controlled by an individual. Moreover, brokers do not have any authority to tell investors that this is the right time to buy or this is the right time to sell. Currently there are crisis in the Europe and in the US and due to these factors the (stock) markets are bound to remain volatile.
I think there has to be sufficient incentive for someone who wants to participate in the markets. Obviously, everyone participates in the market with the view to make money. But we often guide them that this is not the place for the short term or quick gains and they would have to enter only with a long term view.
We as brokers are here to guide you and educate you, we can show you the pluses and minuses of the economy, we know, we study and spend sufficient time on that. We are here to educate the retail investors before they take a call.
We would like to tell the government that we are at that juncture where most of the reforms are done in the capital market. It is now time to look how we can get retail participation back in the markets.
There should be some sort of tax exemption given to salaried class people and small business class for their investment in the capital market. The exemption can be provided on the same lines of infrastructure bonds where tax relief for an investment of up to Rs20,000 is given.
As the government wants to boost the infrastructure sector it gives an incentive to invest. In the same way, the government should provide incentives for investments in the secondary market as well.
For example, if anyone invests up to Rs25,000 in the secondary markets for long term then he should get a tax rebate under Section 80C. The government can put a restriction such that the investments are to be made only in index stocks such that the investors do not invest in ill-governed companies and loose their money. This would be one way to get retail participation by incentivising.
Another way is to educate investors about the capital market. At present, no one really knows about the capital market and its transactions till he became graduate. It is only after they do their MBA or a certification course they learn the intricacies of the capital market.
The policy should be simplified and the government and the regulator have to streamline the policies that benefit the investors.
SEBI is taking that route by streamlining the KYC form. Earlier the investor needed to sign at around 50 times, but now it has been brought down to just 3-4 signatures. They realised the inconvenience caused to investors. SEBI also plans to come out with a KYC Repository Agency (KRA), which will be similar to mutual funds, therefore one KYC can be used across all brokers and later on even other financial institutions like banks may use the same KYC. Therefore, the regulator seems to be slowly addressing these operational issues.
The current regime at SEBI is very proactive and they are coming up with resolutions quickly.
ML: Does BSE plan to go public any time soon?
SS: Yes, that is a very important agenda for us as a Forum. Listing is the biggest issue for the Exchange. It was announced five years ago but nothing has happened so far. We think the listing should be done as soon as possible. The blockade is at the regulator’s end as they are not able to provide the guidelines on how to list your own shares on the exchange.
Two years back the Jalan Committee did not suggest that it is a good idea to list the Exchange but the report neither said no for it. As per the BSE management is concerned, they are ready (for listing).
We are just waiting for SEBI nod to go ahead. The problem lies with the listing agreement. BSE has provided details of two-three international models where the exchanges have been listed and how they follow compliance. It is up to SEBI to decide which model we can opt for.
ML: Do you all see MCX-SX as a competitor?
SS: There would be competition if there is active retail participation, which is not the case at present. The regulator and the government have to take steps so that the equity cult is developed.
ML: BBF sends representations to regulators and government authorities; could you tell us about the recent representations sent?
SS: Our recent representation was to TRAI with regard to the ban on bulk SMS. Messages which are sent by brokers to clients with regards to their transactions were getting blocked. After the representation, about ten days back, TRAI agreed to allow messages permitted by SEBI. Therefore, brokers now can send messages on transactions to their client.
Apart from the representations, every quarter we plan to publish research and white papers, which can be assessed by investors as well as brokers.
ML: How does brokers benefit from the Forum?
SS: This is an open platform for brokers to voice their problems and concerns related with compliance and operations. The forum facilitates the same between SEBI, exchange and other government authorities. It is a platform for collective bargain, where the Forum follows up issues with the authorities. Whoever is a member of either the BSE and the NSE can join the Forum by paying a subscription fee.
ML: What are the other initiatives taken by BBF?
SS: We periodically conduct seminars for brokers on new business initiatives, like MF through stock exchange. We discuss and tell them (the brokers) about operational and compliance issues.
We look forward to conduct full day seminars for investors on market outlook and plan to get experts to speak on equities and commodities and on how they see the market in the immediate term and one or two years down the line. We plan to start from January and will continue once in a quarter.