paragraph

(PTI) In a global first, the Securities and Exchange Board of India (Sebi) is planning to issue regular ‘risk factor disclosures’ on market trends, including surges and collapses, to help investors make right decisions by learning from the regulator’s insights.

The move, which is still in a preliminary stage of discussion, can help investors avoid a herd mentality that has been particularly witnessed during the last couple of years — starting with large-scale selloffs when the pandemic hit the world in early 2020, followed soon by a sharp surge in buying of stocks without understanding the fundamentals and largely on account of get-rich-quick stories and then subsequent losses.

Particularly of significance has been the losses suffered by investors in a large number of IPOs in the recent past and in the highly complicated futures and options segment of the capital market.

“Though the investors have seen a fixed pattern play out in every single cycle — that is, everyone rushes to buy shares when the going is good and then they indulge in panic-selling when a crisis strikes. The basics of capital market investments are always thrown out of the window and one key reason for that is the lack of truly independent insights,” a top official said.

The official further said most of the research material available in the market has been prepared by the market participants who have their own business interests in mind and therefore it could be a great idea if the regulator itself makes public its insights from upswings or downtrends in the market.

Explaining the idea that Sebi is working on, a high-level source said, “It’s time for Sebi to lead by example by making disclosures on matters that can have implications for investors at large and disclosures of important market-wide datapoints.”

“A simple sentence mandated under the present regulations that certain ‘investments are subject to market risks’ has become too cliched and it is like a motherhood statement that does not work anymore. What is required at this moment is that investors get some detailed datasets, that too from the regulator and not only from their wealth managers, whose main aim remains maximising their businesses,” said the source involved in the proposed move.

“We are not a nanny state where a regulator can dictate terms to market participants, including investors, on what to do and what not to do, but it is certainly the responsibility of the regulator to ensure that all necessary disclosures are made and to tell the market participants how those disclosures should be made.

The overall resource mobilisation from the capital market during 2020-21 remained strong at over ₹10 lakh crore, surpassing the previous year's figure of ₹9.96 lakh crore, though businesses in general were affected due to the pandemic.

A unique highlight has been the unprecedented growth in individual investor participation in the securities market, including through mutual funds.

Sebi to issue regular risk factor disclosures on market trends

For the first time across the world, markets regulator will issue risk factor disclosures on market trends to help investors make right decisions by learning from the regulator’s insights

Sensex drops 300 points as TCS earnings weigh on tech stocks

India to be an outperformer this year, says Devina Mehra of First Global

Gold prices flat as lofty U.S. dollar smothers appeal

What is intraday trading? All you need to know

IT stocks likely to remain under pressure amid global headwinds, analysts predict

Correction in input prices are positive for consumer durable firms, says ICICI Securities

Macro data, Q1 earnings, global cues to dictate market trend this week: Analysts

ICICI Securities is 'bullish' on this real estate stock; sees a 24% upside

Continuation Pattern: What does it say about the stock's future price?

Manappuram Finance: Brokerages stay bullish despite a 35% drop in its net profit

In the June quarter, Manappuram Finance reported mixed results. It reported a 32% year-on-year drop in net profit at ₹282.1 crore for the first quarter of the fiscal year, compared to ₹436.5 crore in the previous fiscal.

Income Tax: How to manage your tax issues well

Tax is an important component of your overall financial plan. You should aim to pay the least possible tax without upsetting your investments, which should be designed around your life goals. Read further to know more

SBI Results: Here's why brokerages remain bullish despite Q1 earnings missing estimates

While brokerages were unimpressed by SBI's results on the back of low net interest income (NII) growth and miss in net interest margin (NIM) in the quarter under review but believed the largest public sector lender will report a strong earnings progression right going ahead.

Paytm at near 6-month high as quarterly revenue surges

Paytm, which competes with Google's payment app and Walmart Inc's PhonePe in India's digital payments market, said it is on track to achieve operational profitability by September 2023.

Long-term Investing: Godrej Consumer Products turned ₹1 lakh to ₹75 lakh in 20 years

stocks

In the last 20 years, the stock has jumped from around ₹11 in August 2002 to currently trade around ₹873, rallying as much as 7,474 percent in this period.