'Manage derivatives risk better'

The Securities and Exchange Board of India (SEBI) chairman M Damodaran on Thursday called for improved risk management systems in the capital markets.

Speaking from Mumbai at the Second International Conference of the Asia Pacific Association of Derivatives at IIM-Bangalore, Damodaran said: "The economies of emerging markets are growing rapidly. They are seeing a greater inflow of investments from across the globe. They are seeing more investors of different categories and we believe there is a need for more sophisticated products."

He added that along with the introduction of more sophisticated products in the capital market, "We also need to have improved risk management systems in the capital market because I believe that is the only way you can bring and retain a large number of investors in the market."

Urging the delegates to look at innovations in the marketplace, Damodaran said: "The regulators across the Asia-Pacific region are looking for suggestions to deal with derivatives. We need to look at more sophisticated products and to see that the market is enabled to be the vibrant, well-regulated and orderly place that the average investor expects it to be."

Congratulating the IIM-B, the SEBI chief said: "I appreciate the IIM-B for having brought this conference to Bangalore, which I regard the cerebral capital of India, while the financial capital namely Mumbai, is getting a lot of criticism at present."