SEBI’s efforts to reach out to small investors..

It remains a puzzle why a body which is behind much of India story remains virtually ignored by pink papers and expert discussions. There is barely any acknowledgement of the fact that Indian capital markets have come such a long way since 1992 scam that much of it is unimaginable. We have perhaps the most developed capital market infrastructure in the world. If not the most, then we are there with the toppers. It is not about appreciation alone, even criticism is welcome as it is latter which helps more provided it is constructive ofcourse.

Apart from just capital market development, the one itching thing is to reach out and educate small investors. After all despite all this development the small investor has stayed away from the markets. This article looks at SEBI’s efforts to reach out to small investors:

The general perception about market regulator, Securities and Exchange Board of India (Sebi), is that of a strict watchdog, ever ready to haul errant corporates, intermediaries or other entities off the street. There is another side to Sebi, however – one that it is working hard to project. Over the past year or so the regulator has invested significantly to shed its dour policeman-like image and portray itself more as a friendly neighbourhood protector with an ear out for the smallest investor.

The ‘har investor ki taqat’ campaign being aggressively pursued across all media is driven by the need to reach out to from small towns who are particularly vulnerable to ponzi schemes. The regulator is particularly keen to drive home the point after recent stock market debacles such as the Sarada scandal. The campaign is also meant to increase the risk taking appetite among investors in small towns and thereby deepen thein the country.

reaches out to investors through mass media with various messages, which are aimed at spreading awareness against unregistered collective investment schemes (CIS)/and spreading information related to the grievance redress mechanism,” said a Sebi spokesperson. The campaign, being currently handled by advertising agency Ogilvy & Mather (O&M), was launched about three years back. According to B Ramanathan, managing partner, O&M Mumbai and Calcutta, “The aim is to educate investors and tell them that there is an entity out there protecting their interests.” The larger objective, he says, is to increase retail participation in the equity market.

The agency has done five advertisements so far (across print, radio and television) and has deliberately infused humour to get its point across. The ads aim to change common perception about the regulator and make it more approachable to the community of investors across the country.

This is not the first time that a regulatory institution has reached out to the masses. In 2010, RBI had roped in IBD, a subsidiary of advertising agency Percept-Hakuhodo for a campaign meant to educate people about banking practices while enunciating its role as a central bank. However, it was a limited campaign and quite restrictive in its appeal says Harish Bijoor, a brand consultant. Sebi seems to have done a better job thus far, he says.

The capital market regulator has been trying to reach and educate investors for sometime now. Now it plans to even allow celebrities to push mutual fund investment.

The question of course is to understand the impact of such exercises. Do investors benefit from such regulator driven exercises? Or should capital market firms do the job?

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