December 29, 2014

Rebuild Trust in Capital Markets

IDFC Institute Visiting Fellow in Political Economy Praveen Chakravarty, writes in Mint on the need to build greater trust in equity markets, to encourage the average household to enter equity markets.

"That the equity markets are dominated by handful of speculators and operators is a common refrain among most Indians. When the beacon of corporate governance and a much adored company such as Infosys is subject to rampant insider trading on news such as the return of Narayana Murthy, a decision that ostensibly only the board members and select few are supposed to be privy to, unlike a merger, it is easier to empathize with the feeling of distrust about the stock markets.

While the Securities and Exchange Board of India (Sebi) has been cognizant of this and proactively announced new and well thought through insider trading rules recently, it is not lack of rules that is the problem. It is the rigorous enforcement of it."


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