New products needed to mitigate capital market risk: Sundaresan

Wednesday, June 23, 2021

New Delhi, 23rd June 2021:
The risk appetite of the investors differ so it is very important for the market regulator to come out with newer products from time to time cater to them stated V.S. Sundaresan, Executive Director, Securities and Exchange Board of India (SEBI) while speaking of new products to be launched at the virtual event- Indian Capital Market @US 5$ Trillion Mark - The Way Forward organized by The Associated Chambers of Commerce and Industry (ASSOCHAM).
Shri Sundaresan informed that India has a higher percentage of the younger population as compared to people from other countries. “There is a need to create an ecosystem with a robust enforcement system leveraged by technology,” he said.
He stated that with the launch of the Gold Spot exchange, India has an opportunity to become a price setter. “With the launch of this Gold Spot Exchange, there will be an opportunity to offer both spot gold and the electronic gold receipts to be traded on the exchange as securities,” he said.
He explained that other new products like the innovators growth platform (IGP) and the introduction of Options on commodities would help mitigate risk among a different class of investors. “Non-profit organizations would be able to raise capital for their ventures through the Social stock exchange which is yet another new product,” he said.
Speaking about the uniform security market code, Shri Sundaresan stated that by removing the provisions which are not useful, it will really be helpful for the ease of doing business by stating all the required compliance in one code.
He also informed that the market regulator is also working on different kinds of concepts for the benefit of the capital market. “Things like controlling shareholders with a different type of share voting pattern will help in raising money by selling stake but not losing control. The percentage needs to be significant even if not a majority to become a controlling stakeholder,” he said.
Mr. S.C. Aggarwal, CMD, SMC Global Securities Ltd stated that it took around 60 years to reach a figure of $1 trillion, 12 years to reach another $1 trillion, and just 5 years to reach the next $1 trillion.
“So we should expect 3-4 years to reach the figure of $5 trillion due to several factors like the PLI schemes. However we need to put a lot of emphasis on getting the infrastructure in place,” he said.
Mr. Arun Raste, MD & CEO, NCDEX stated that a comparison of the US economy and its capital market capital shows a difference of around 198 percent while that of India is just around 104 percent. “There is a huge potential which can be tapped,” he said.
According to Raste, the share of agriculture is growing in India’s GDP. “From a 16- 17 percent, Agriculture’s share has grown to 20 percent with a 3.4 percent growth even during the pandemic. It was mostly the government spending in agriculture which was spearheading the growth,” he said.
He said that mitigating risk in the agriculture sector is much needed.
Mr. Neeraj Kulshrestha, Chief Regulatory Officer, BSE Ltd stated that for the development of the capital markets, there is a need to further push of reforms. “There is a need to push for faster clearances. To set up a power unit, one needs to get almost 90 different kinds of clearances,” He said.
He also stated that financial aspects like taxes and interest rates need stability.
Other dignitaries who were present on the occasion were Mr. Sandeep Bhardwaj, Chief Executive Officer - Retail Broking, IIFL Securities Ltd, Dr. Saurabh Agarwal, Professor, Indian Institute of Finance, CA Atul Kumar Gupta, Advisor, Astrazure Legal Services Pvt Ltd., Mr. Rishi Nathany, Head – Business Development and Marketing, MCX, Mr. Narinder Wadhwa, Managing Director, SKI Capital, and Mr. Madan Sabnavis, Chief Economist, Care Ratings Ltd.
ASSOCHAM initiated its endeavour of value creation for Indian industry in 1920. It was established by promoter Chambers, representing all regions of India. Having in its fold over 400 Chambers and Trade Associations and serving over 4.5 lakh members across India. ASSOCHAM has emerged as the fountainhead of Knowledge for Indian industry, which is all set to redefine the dynamics of growth and development in the Knowledge Based Economy. More information available on
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