Need to bring domestic savings into the market: U K Sinha, Chairman, SEBI

SEBI Chairman Mr U K Sinha, delivered the Inaugural Address at CAPAM 2015 organised by Federation of Indian Chambers of Commerce and Industry (FICCI). While addressing the gathering of bankers, investors and corporate executives, The question, Mr Sinha said, is that while the Government and regulators keep bringing policies and programmes which can help in reforms, how to bring about domestic savings into the market. He went on to explain that in the long run, the target for the system is to achieve the growth potential of the country. The problem arises when we have our own target which has no connection with the potential of the economy. He, however, expressed satisfaction that in the last year and half, the Government came out with a number of reforms that helped in investments and execution of projects. The investment inflows confirm that the country is moving in the right direction, although the pace of growth may be debated.

Mr Sinha defined the role of the regulator, as per the mandate given by Parliament, as three-fold: protecting the interests of investors; regulating the market; and developing the market. He assured the house that SEBI took its role of developing the market very seriously. The measures taken by SEBI are primarily guided by the consideration that an investor invests in order to make the investment grow, and all investors need to be assured of access to reliable data, besides a strong grievance redressal mechanism, with protection for minority shareholders. By and large, said Mr Sinha, the measures adopted by SEBI have been received well by the markets. These measures have provided confidence to primary markets. The start-up scene in the country is robust, and the listing norms for Start-ups and crowd-sourcing guidelines for the same are aimed towards supporting entreprenuers. With regard to the recent merger of SEBI with FMC, Mr Sinha declared that we are fully geared towards handling this additional responsibility.

Mr Mark Wiseman, President and CEO, Canada Pension Plan Investment Board (CPPIB) said Mumbai is as important to us as Hong Kong, London, New York and Sao Paulo, he said. Already they have made a number of investments in companies like Shapoorji Pallonji, Larsen and Toubro, and the Piramal Group. He expressed confidence that the percentage of their portfolio will grow steadily because India's and CPPIB's growth trajectories complement each other.

But the focus of his presentation was the need to think long term. We need to maximise long term returns to our beneficiaries without risk of loss. CPPIB's investments in India all represent long term investment of capital. We can take a long term view in India because your markets reward patient investors. If you succeed, we succeed, he said. He emphasised that the present mentality of aiming for immediate returns with less spending on R&D has to change. To this end, CPPIB launched the 'Focusing Capital on the Long Term' (FCLT) initiative, which has now become a global movement. FCLT was born out of the need to find practical solutions for short term behaviours, and lays out a road map for the long term.

Ms Chitra Ramakrishna, Managing Director and CEO, National Stock Exchange (NSE) Group, delivered a Special Address and said We have reasonable reason to be proud of what the country has created, she observed, referring to our vibrant globally benchmarked capital markets. But she also observed that there is a need to consolidate our strengths, and become a global leader in new asset classes. The primary goal is how to channelize savings into capital creation. While institutional capital is getting channelized, small savings should also be made to count. The challenge is to adapt innovation to make growth inclusive and help small savers benefit from growth and prosperity in markets. We need to think about innovative interventions, she said. If capital market inclusion becomes 'mann ki baat', it touches everybody's lives. Financial inclusion must get that kind of inclusion.

Earlier, Mr Sunil Sanghai, Chairman, FICCI Capital Markets Committee and MD & Head-Banking, India, HSBC, said We have come a long way since a year ago, he observed. Welcoming the entry of CPPIB in India, he said that to sustain high economic growth, large and long term capital is required. FDI has always been an important contributory towards this, but portfolio investment is critical. He lauded the Government for its efforts to provide a robust financial framework, and for improving the country's standing in minority shareholder protection.

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