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Investor interests will be protected: SEBI

By Our Special Correspondent

HYDERABAD DEC. 20. "Let people know we are on high alert" observed G. N.Bajpai, Chairman of Securities and Exchange Board of India (SEBI), adding "as a regulator we have taken any number of measures and will continue to do so to fulfil our role as a watchdog. We watch for unusual movements, take note and action".

Speaking to media on the sidelines of the Convocation 2003 of the Institute of Chartered Financial Analysts of India (ICFAI) here on Saturday, he said "I cannot stop buying or selling (that takes place) in the market. I cannot dictate the market. Regulator must help develop, but not put development (of capital markets) into difficulties".

Mr. Bajpai's observations were in response to pointed references by presspersons to the similarities in the market movement-like the shifting of investments to B1 and B2 and trade for trade categories, which has usually preceded market peaks only to be followed by crashes in the past.

Seeking to reassure investors, Mr. Bajpai pointed out that SEBI has taken a number of measures like bringing down filters, increasing margins, introducing rolling settlement, and trade for trade. In fact one more "pro-active" measure taken recently was regarding the "preferential offers". The Primary Market Committee recommended that selling cannot take place in such instances within six months. This has been put on the net and public opinion has been invited-for which two weeks time has been given. Once this is received, SEBI will give its opinion, he said.

On foreign institutional investors (FII), he said they accounted for about 25 per cent of investments in the capital market, and hedge funds accounted for 20 per cent of this 25 per cent. They come through the participatory notes and we have the disclosures norms, he pointed out when asked about risks from this quarter. On Indian mutual funds, he felt they were far safer than in other countries.

Mr. Bajpai felt best safeguard that SEBI can take, and has been doing, was to educate the investors and let them make "informed decisions". The regulatory mechanism in India was evolving and it will serve as an effective watchdog, he said. On the issue of regional stock exchanges, he said SEBI was willing to help them, but it was for them to take a decision on issues like "Indonext (network of regional stock exchanges)". The options were clear-either to form Indonext, merge with bigger stock exchanges or "decide for themselves on a third alternative", he said.

Later at the convocation, Mr.Bajpai spoke on the theme "Journey from vision to values".

A. Besant C. Raj, Chancellor of ICFAI University, in his convocation address said 135 students were receiving Chartered Financial Analyst (CFA) charter having completed MS(finance) programme, and 899 students of ICFAI Business School were receiving Postgraduate Diploma in Business Administration. The total number of CFA charter holders in the country has now grown to 2138, he said.

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