In a move to inject confidence in retail investors, Finance Minister P Chidambaram on Saturday suggested that bourses should strive to demystifying the functioning of stock market and deal with malpractices including insider trading.
Speaking at the inauguration of the new stock exchange MCX-SX, Chidambaram said: "It is important that we have to demystify the operations of the stock market. We have to make sure that there are no malpractices like insider trading. Only then the retail investors will come to stock market in very large number."
He expressed concern over malpractices in equity trading and as a word of caution to the two existing bourses – National Stock Exchange and Bombay Stock Exchange -- and the new one MCX-SX, saying they all should endeavour to keep the products.
He bluntly said: “If you want retail investors in India to participate in the stock market, you have to keep the product simple and inject confidence in the investor (so) that the integrity of stock trading in preserved."
India has the largest number of listed companies in the world, he said, adding that stock markets would become more competitive with the entry of MCX-SX.
The country’s new bourse MCX-SX , the third stock exchange in the country after BSE and NSE, is set to commence live trading in the capital market's cash, and futures & options (F&O) segments from February 11, 2013.
Initially all the securities available for trading will be in 'permitted to trade category'. Trading hours will be similar to BSE and NSE, from 9 am to 3:30 pm.
As many as 1,116 securities will be available for trading in the capital market segment, when it opens for live trading on Monday.