Committing to strengthen Sebi, Prime Minister Manamohan Singh on Friday asked the capital market regulator to eliminate insider trading and take steps to encourage small investors to invest in equities.
"... regulation should be guided by the need to increase transparency and lead to higher investments being channelized into productive endeavours, which strengthen our economy," he said at the silver jubilee celebration of Sebi.
"Our government remains committed to doing everything that is needed to strengthen Sebi so that it can deliver even more effective enforcement," he said.
Calling upon Sebi to upgrade and improve itself, Singh said, "A key indicator of Sebi's future effectiveness will be its ability to root out the hard-to-define but extremely pernicious disease of insider trading."
The Prime Minister said: "Mobilisation of household savings into productive investment in the capital market must be a key goal for everyone in the financial sector."
Concerned over poor participation of households in financial market, the Prime Minister said the retail investors must be provided incentives to invest in financial assets such as securities, insurance products, banking and pension products.
The initiatives like Rajiv Gandhi equity savings scheme, inflation indexed bonds and various steps announced by SEBI, he hoped "will enthuse retail investors to access capital markets, increase financial intermediation, widen and deepen our financial system and positively influence the distribution of savings in favour of financial assets."
SEBI can also make a vital contribution to the revival of the economy and towards laying the foundations for more rapid growth by facilitating infrastructure related investment, he said.