G-Secs should be issued in demat form for new retail investors: SEBI Chairman

New Delhi: Mr Ajay Tyagi, Chairman, SEBI today emphasized on the need to increase the participation of new retail investors in the capital market. ?We have seen a huge surge in participation of retail investors in the equity market in the last few months. The fact that there is also a surge in opening up of demat accounts suggests that many of these retail investors are perhaps first-time investors in the stock market,? he added.

Addressing the 17th Annual Capital Market Conference ‘CAPAM 2020’, on the theme of ‘Atmanirbhar Bharat: Role of Capital Market’, Mr Tyagi said, ?With a view to facilitating a smooth and welcome entry of these newcomers to the capital markets, it would be ideal that they begin their journey by first investing in risk free G-Secs. The issuance of G-Secs in demat form, apart from easing the process of making investments by non-institutional participants in these securities, may also facilitate easier raising of the borrowings.?

In order to further improve the corporate bond and G-Secs market, Mr Tyagi said that there is an inter-linkage between the corporate bond market and G-Sec market. ?The required reforms in the corporate bond market should be brought in without any further loss of time. ?Unification of financial markets is an idea whose time has come,? he added. Mr Tyagi also said that the market infrastructure for corporate bond and G-Sec markets should be integrated. Having two separate ecosystems results in artificial segmentation of investors and divergent governance and regulatory norms for institutions in the two markets performing similar functions, he said.

Highlighting the potential of Indian financial market, Mr Tyagi said that we are passing through difficult, stressful and uncertain times. However, the challenges also bring along with them several opportunities.

?The revival of the stock market and an uptick in fund raising by the corporates is encouraging. I exhort the captains of the industry to come forward and make bold investment decisions, and contribute towards building an Atmanirbhar Bharat,? he said.

In a bid to provide relief to companies affected by COVID-19, Mr Tyagi said that SEBI has issued a number of relaxations to facilitate fundraising by the corporates. ?SEBI has come out with relaxed norms for preferential issue pricing and exemption from open offer for eligible stressed companies. These relaxed norms, finalized after wide public consultation, can be used for restructuring of stressed companies without going through the IBC process. Of course, the guidelines have due safeguards built-in to prevent misuse,? he added.

Mr AshishKumar Chauhan, Managing Director & CEO, BSE said that smooth functioning of Indian markets during this time has proved beyond doubt that India is among the highest technology using nations in the world. The ability of the Indian IT and BPO sector with voice banking system and SEBI have proved that India is a reliable country with tremendous skills,? he added.

Dr Sangita Reddy, President, FICCI while congratulating the SEBI and the entire capital markets for buoyant uninterrupted performance, urged SEBI to hasten the regulation enabling international listing.

Mr Rashesh Shah, Past President, FICCI and Chairman & CEO, Edelweiss Group said that we need to work more on the development of the bond market. ?Credit is an important part of the economy and we can’t have only the banking system to provide credit,? he said.

Mr Sunil Sanghai, Chairman, FICCI National Committee on Capital Markets and Founder & CEO, NovaDhruva Capital said that we need to improve the depth and efficiency of the market and bring innovation to it.

Mr Himanshu Kaji, Co-chair, FICCI Capital Markets Committee and Executive Director & Group COO, Edelweiss Financial Services said that the increasing use of technology is one silver line in these times and will play a key role in future of capital markets.

‘FICCI Experts’ Voice 2020′ & ‘FICCI-IIM Ahmedabad Report: Women on Boards in India’ were also released during the session.

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