Markets watchdog to beef up disclosure norms

Friday, 23 November 2007, 08:00 Hrs
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New Delhi: After regulating the activities of unregistered foreign funds and investors on stock markets, India's markets watchdog says the time now had come to beef up disclosure norms and ensure greater transparency.

"Good times are best times to regulate systemic deficiencies," M. Damodaran, chairman of the watchdog Securities and Exchange Board of India (SEBI), told the conference of the Asian Securities Analyst Federation here Friday.

"Regulators cannot afford to play with the black pieces in a chess board. They have to play with the white pieces and make the fist move to ensure orderly conditions in the market," Damodaran said.

In recent months, India has witnessed a surge of foreign capital, which has pushed the rupee to its strongest against the dollar since 1998. "It tests our ability to manage large inflows and sometimes larger outflows," he said.

Damodaran said Indian markets were growing at a faster rate, compared to other markets, so it was of interest to sustain this growth. At the same time, a key challenge was also in effective utilisation of the large inflows of funds.

"There are certain categories of investors from mature markets who have landed in our backyards as our markets give them good returns. They will abandon when we don't give them good returns. This will lead to volatility," he warned.

Encouraging the smaller investors to explore opportunities in capital markets, Damodaran said: "Our agenda for 2008 is to focus on educating the investors so that there is value for everyone in the market."

Calling for a check on unethical practices in trading, he also attacked the so-called experts and financial analysts and said few of them could put their hands on their hearts and say their advice were entirely objective and transparent.

"A time will come when the profession of analysts will become irrelevant."
Source: IANS
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