Small Investors To Get Priority Allotment

In a bid to attract small investors back to the primary market, the Securities and Exchange Board of India has allowed issuers to give priority allotments to small investors.

This implies that any investor applying for securities in a public issue up to 200 securities will be given priority in allotment. This will be provided for by reviewing the existing guidelines for disclosure and investor protection.

Said Sebi chairman D R Mehta: In countries like UK, when they went for disinvestment of government held organisations, the allotment priority was initially given to the small investors. It was ensured that shares were well distributed among small investors.

 

He was of the view that the market cannot be merely governed by economics. He said: There is a need to have a social angle to it. Besides this, the small investor also needs to be encouraged to invest in the market.