Market excitement
It will be a historic Monday for India’s capital markets as MCX-SX, the third major exchange, goes live with its index SX40. An exciting future lies ahead as the young combative exchange promises to be inclusive and offer real competition to the National Stock Exchange and the 138-year-old Bombay Stock Exchange.
Around 85 per cent of all trades now come from five major cities. MCX-SX promises, however, to reach out to areas as far flung as Nagaland and stimulate the ailing bond market.
The exchanges and regulators, like the Securities and Exchange Board of India and Reserve Bank of India, will do well to heed the suggestion offered by finance minister P. Chidambaram to bring back retail investors. They have lost so much of their hard-earned money in different scams that they must be wooed back to the markets.
Mr Chidambaram, among other things, made a plea for simplification of procedures and specifically integration of the KYC (Know Your Customer) norms. He pointed out, quite rightly, that there are just too many regulations that frighten away investors who don’t like to answer too many questions. He suggested in the first phase KYC under a single regulator must converge and thereafter there should be a convergence of KYC under different market regulators. The FM spelt it out: “What is the use of so many regulators if the investor stays away?”
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