Areas of weakness in capital market, Sebi

“We have grown quite a bit in the capital market and its penetration, but there are areas of weakness,” Sinha said. “These areas of weakness become very stark if we discover that there are segments of the geography where a lot of activities are talking place both by way of surplus money which can be invested and also by way of need for raising money,” he said.

“The approach of the regulator is to provide more and more products. The approach is to provide simplification and convenience to the investors going forward. The approach is also to encourage corporates to raise money domestically,” Sinha said in his key note address to the panel discussion on ‘Increasing Access to Capital to Stimulate Sustainable Economic Growth: The Road to Deepening India’s Capital Markets’.

Observing that a “very, very large” portion of the capital market is concentrated in the eight to ten large cities of India, Sinha said there will be a need to deepen the access of the capital market to small markets and rural areas. “I believe mutual funds can play a very important role in that,” he said.

He said that Sebi is also concentrating on governance issues related to listed companies. “We have insisted that asset management companies must have a voting policy which should be know to people.”