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NSE chief urges investors to protect themselves

R H Patil, managing director, the National Stock Exchange, today cautioned investors against "recklessly investing" in equities in the fast-changing scenario and advised them to remain alert.

Early this week, he addressed the inaugural function of "National Convention on Investor Protection" in Ahmedabad, organised jointly by the NSE and Consumer Education and Research Centre.

Patil pointed out that investors should bear in mind that the days of continuous and sharp appreciation in the equity market are over. Investors had also lost huge amounts in companies which had vanished, he said, adding "We have not been able to assess the dimensions of the problem of vanishing companies. We don't know where the money had disappeared".

He said that investors formed the largest segment in the equity market. Therefore, justice required that the majority's interests be protected. He, however, added that this was not to say that other's interests were less important. But "the others" were powerful enough to take care of their interests. Intermediaries, for instance, had always formed their own club and had their way. Investors were at the mercy of others.

The scene had, however, changed with an increase in transparency and it would be a wise policy to protect the majority's interests. In the past four years, the NSE had stepped up surveillance and brought about several changes to protect investors.

It would, however, be another 25 years before an organised system could take care of their interests. Till then investors should keep up their efforts to protect their interests.

Patil said the next phase of the NSE's programme would envisage popularising the Central government securities vis-à-vis all other modes of investment, including banks and mutual funds.

Earlier, inaugurating the convention, chief justice of the Gujarat high court Justice Balakrishnan, who presided over the function, said that it was time investors "did loud thinking" and took cautious steps. Often the investors could not prove the fraudulent element even when they were duped.

Advising caution on the part of investors themselves, Justice Balakrishnan observed that the Securities and Exchange Board of India was a government institution and therefore, "whatever failings we find in government institutions are found in the SEBI too."

UNI

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