An expert panel of Securities and Exchange Board of India (Sebi) today rejected a proposal of floating a stabilisation fund to support the stock market in case of a major collapse.
The proposal was discussed in the meeting of Sebi’s Secondary Market Advisory Committee (SMAC) headed by IIM (Ahmedabad) Professor J R Varma.
According to the proposal, mooted by a former member of SMAC, there should be a separate tax on stock market transactions and the proceeds should be used to create a fund that can be used to support the market.
Members of SMAC rejected this proposal unanimously, said sources familiar with the development. “The view was that the regulator or the government has no role in supporting the stock market.”
Earlier, there were demands to set up a similar fund, but was rejected by the government.
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