Bring more retail investors to market: Jaitley to Sebi

Sebi was also asked to consider new measures to address issues like investor awareness

Pitching for greater transparency in rule-making and other functions of regulators, Finance Minister Arun Jaitley today asked Sebi to work towards attracting more retail investors to the capital markets.

Addressing the board of the capital markets regulator, Jaitley also asked Sebi to consider new measures to address issues like investor awareness, while he also discussed issues related to recommendations of the Financial Sector Legislative Reforms Commission (FSLRC).

The FSLRC report, submitted last year to the government, has suggested wide-ranging reforms in the way the financial sector is regulated in the country including in the banking, insurance and capital market segments.

Talking to reporters after the board meeting, Sebi Chairman U K Sinha said that the Finance Minister discussed and gave his ideas about the securities market.

Sinha also indicated that the government might have wider consultations before taking any legislative actions on FSLRC recommendations.

This was Jaitley's first address to the Sebi board after he assumed office as Finance Minister in May this year. Currently, the Sebi board has eight members, including Chairman, three whole-time members, Economic Affairs Secretary, Corporate Affairs Secretary, an RBI Deputy Governor and a part-time member.

"Two-three important messages which the Minister gave to us were, for example, measures to be taken to attract retail investors into the market.

"He was very keen that we should take more measures...And issues like investor awareness were discussed," Sinha said.

The Sebi chief said that Jaitley also discussed the FSLRC recommendations with the board.

"Finance Minister suggested that the regulators should move towards greater transparency," Sinha said.

When asked about the impact of the suggestions made in the FSLRC report, Sinha said that any decision in this regard would be taken by the government and not in the board meeting of Sebi.

"He (Jaitley) did not disclose his mind on this," the Sebi Chairman said.

On legislative measures suggested in the FSLRC report, Sinha said that his understanding was that the government would have more consultation before they make up their mind.

Asked about the non-legislative changes, Sinha said, Finance Minister is of the view that "all regulators should work towards more transprency in regulation-drafting and all...

Asked about the surveillance functions of Sebi, Sinha said that Sebi also presented before the board a report on all such actions taken by it during the last quarter.