Concerned over poor involvement of retail investors in capital market, the Securities and Exchange Board of India (Sebi) today said it was planning to improve the investment environment to increase their participation.
"We are worried and concerned that retail participation is showing a decline. We, in Sebi, would like to create the right environment for retail to participate in a big way, not only in big cities, but also in small towns and districts," Sebi Chairman UK Sinha said in an interview.
Over the last few quarters, retail participation in the Indian market has only been 10%, whereas 90% is directed towards the futures and options (F&O) segment.
Sinha also said the committee set up by the Sebi to look into issues plaguing the mutual funds industry will submit its report by mid-June.
"In two to three months, a significant chunk of problems of the industry (mutual funds) will be resolved," he said.
There has been a net outflow of funds from the mutual fund industry during 2010-11.
Moreover, the geographical spread of the mutual fund industry is very skewed. Out of the the total amount of equity money raised by the mutual fund industry, 32% is raised from Mumbai and 75% from the top ten cities.
Regarding the issue of disclosures in the IPO (initial public offers) market, Sinha said: "There is too much disclosures in unstructured manner for IPOs. As an individual I find it very difficult to appreciate what information is going to help me. Sebi set up committee to look into IPO market".
He, however, said the "disclosure based regime will continue".