Sebi’s Performance the Perception of Brokers and Investors

8/18/2019 Sebi’s Performance the Perception of Brokers and Investors

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Chapter Eight

SEBI’S PERFORMANCE: THE PERCEPTION OF BROKERS AND INVESTORS

In this chapter the perceptions of the brokers and investors has been presented. This was in

fulfillment of one the objectives of the required the study of brokers and investors’

perceptions about SEBI and its performance in the Indian apital !arket. "s a result# anattempt has been made to present the viewpoints of Brokers and investors on their perception

of the performance of SEBI. $or this purpose# data was collected from %&' brokers and (&

investors all of them located in the )udhiana Stock E*chan+e and its environs. Section " of

this chapter presents the survey of the apital !arket Intermediaries as re+istered members

of the Securities and E*chan+e Board of India ,SEBI-. Section B presents the survey of the

investors. Their views were e*pressed on a wide variety of issues concernin+ the apital

!arket re+ulator in India. Their views were carefully analysed and presented# usin+ fi+ures

and tables in this chapter.

There have not been any survey studies on this aspect# of SEBI# where both the brokers and

investors have been surveyed for their opinions. This research# however# represent the first

joint opinion survey of brokers and investors. It is necessary for SEBI to know and

understand how they feel. The fact that SEBI is out to serve them as participants of the

capital market warrants that# they are listened to. SEBI in attemptin+ to assess its

performance must receive input from the people bein+ served.


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Fig"!"-

N$'ber %& Part*er+

S%$r(e: Pri'ar) Data A*a)+i+ ,-../0

Tabe !"2: N$'ber %& Me'ber+

S. 9ender umber 0ercenta+e

!embers 8

% !ale 4' 62.1& ((.15

' $emale '6 %1.'5 ''.56

1 il 7esponses (2 6%.66

Total

%4% %&&.&& %&&.&&


The 0rivate ompany setup is presented in Table 4.1 showin+ the number of members

present. :ut of the %&5 members in the private limited companies 4' members are male#

makin+ a percenta+e rate of ((.158 and $emale members are '6# makin+ a percenta+e rate

of ''.568 ,see $i+. 4.1-.


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5

Fig"!"2

N$'ber %& Me'ber+

S%$r(e: Pri'ar) Data A*a)+i+ -../

In Table 4.6 the number of employees is stated as 6'1. This is an indication that apital

!arket employees’ composition is made up 44.43 8 bein+ male and the reminder# %%.%% 8

employees bein+ female. The Indian apital !arket is a male dominated society. )ookin+ at

the ratio between males and $emales in the workin+ environment the sole proprietor#

partnership business and the private company# one is forced to draw the conclusion that men

are risk takers. This means that the female members are more risk averse ,see $i+. 4.6-.


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Tabe !"3: N$'ber %& E'p%)ee+ i* the Fir'

S. 9ender umber 0ercenta+e

Employees8

% !ale 1(5 4(.66 44.43

' $emale 6( %&.31 %%.%%

1 il 7esponses ( %.51

Total

61& %&&.&& %&&.&&


Fig"!"3

N$'ber %& E'p%)ee+ i* the Fir'



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Tabe !"4: T)pe %& Capita Mar5et I*ter'e6iar)

S. Type of Intermediary umber 0ercenta+e

% !erchant Banker % &.42

' 7e+istrar and Transfer "+ent ' %.53

1 ;nderwriter


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Tabe !"7: N$'ber %& Cie*t C%'pa*ie+ &%r 8hi(h &ir' i+ I*ter'e6iar)

S. Type of ompany umber 0ercenta+e lients8

% !anufacturers '&5 4.63 4.23

' ?holesalers 32 1.3% 1.35

1 7etailers '&1% 41.54 46.(&

6 $orei+n International Investors &.&& &.&&

2 Service ompanies 55 '.(' '.(2

5 il 7esponses '3 %.%3

Tot

al

'6'( %&&.&& %&&.&&


Table 4.5 reveals a total of number of '134 clients for which the apital !arket

Intermediaries handle their operations. In the list of clients# the 7etailers are at the top with

46.(&8# followed by !anufacturers with 4.238 ,see $i+. 4.5-. )ookin+ at the situation of

Individual Investors# the fi+ures reveal that a total of %%#%6& ,see Table 4.5- are actively

involved in the Indian apital !arket investment. The fi+ures reveal that out of this number#

(4.3(8 are male and only '%.&1 bein+ women. "+ain women show evidence of risk

averseness in the Indian apital !arket ,see $i+.4.(-.

Fig"!"7

N$'ber %& Cie*t C%'pa*ie+ &%r 8hi(h &ir' i+ I*ter'e6iar)



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Tabe !"9: N$'ber %& I*6ii6$a I*e+t%r+

S. 9ender umber

0ercenta+e

Investors8

% !ale 4(3( (4.(3 (4.3(

' $emale '161 '&.33 '%.&1

1 il 7esponses '2 &.''

Total

%%%52 %&&.&& %&&.&&


Fig"!"9

N$'ber %& I*6ii6$a I*e+t%r+



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25

Tabe !"!: M%e'e*t %& I*6ii6$a I*e+t%r+

S. =irection umber

0ercenta+e

Ind. Investors

% Increasin+ 51 5%.(5 5(.&'

' =ecreasin+ 1% 1&.13 1'.34

1 o chan+e % &.34

6 il 7esponses ( 5.45

Tot

al

%&' %&&.&& %&&.&&

S%$r(e: Pri'ar) Data A*a)+i+ ,-../01 ; umber of 7esponses

)ookin+ at the movement in the direction of the apital !arket transactions# the primary

data analysis indicates that number of individual investors in recent years is increasin+ ,Table

4.4 and $i+. 4.4-. "s the trend in individual investors show an increase# the movement in

company or institutional investors shows a decreasin+ trend ,Table 4.3 and $i+. 4.3-.

Fig"!"!

M%e'e*t %& I*6ii6$a I*e+t%r+



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Tabe !"/: M%e'e*t %& (%'pa*) I*e+t%r+

S. =irection /umber

0ercenta+e

o. Investors 8

% Increasin+ %( %5.5( 16

' =ecreasin+ 11 1'.12 55

1 o chan+e ' %.35

6 il 7esponses 2& 63.&'

Total

%&' %&&.&& %&&

S%$r(e: Pri'ar) Data A*a)+i+ ,-../01 ; umber of 7esponses

Fig"!"/

M%e'e*t %& (%'pa*) I*e+t%r+



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Tabe !"#.: A++e++'e*t %& 'argi* (%*tr% +a&e


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Tabe !"##: Rea+%*+ &%r g%%6 'argi* (%*tr%

S. :pinion umber 0ercenta+e

% ontrol of hi+h volatility 5 5

' )ess default risk 3 3

1 $inancial safety and discipline 6' 6%

5 apital 0rotection for Brokers 6 6

( >ed+e a+ainst future losses 1 '

4 il 7esponses 14 14

Tot

al

%&' %&&


The mar+in control is necessary evil# it keeps the market stable# but at the same time it

reduces the operatin+ mar+ins of the market dealers. Table 4.%' and $i+. 4.%' present the

reasons why mar+in control is seen to be a bad device. >owever# the ar+uments for mar+in

control outwei+h the ar+uments a+ainst its operation.

Fig"!"##

Rea+%*+ &%r g%%6 'argi* (%*tr%



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Tabe !"#-: Rea+%*+ 8h) 'argi* (%*tr% i+ ba6


% E*cess !ar+in % 2&

' o 0roper ?arnin+ Systems % 2&

1 il 7esponses

Total

' %&&


Fig"!"#-

Rea+%*+ 8h) Margi* C%*tr% i+ ba6



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Tabe !"#3: The E&&e(t %& the 'argi* +)+te' %& Tra6i*g %* B$+i*e++

S. =escription umber 0ercenta+e

% Aery Badly 1 '.36

' Badly ' %.35

1 "vera+ely 2% 2&.&&

6 ot at all 6& 13.''

2 il 7esponses 5 2.44

Tot

al

%&' %&&.&&


Fig"!"#3

The E&&e(t %& the 'argi* +)+te' %& Tra6i*g %* B$+i*e++


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Tabe !"#4: Pr%be'+ C%*(er*i*g SEBI a+ a Capita Mar5et I*ter'e6iar)

S. "nswer umber 0ercenta+e

% es %5 %2.53

' o (4 (5.6(

1 il 7esponses 4 (.46

Total

%&' %&&.&&


The apital !arket Intermediaries indicate that most of them do not have any problems with

SEBI. (5.6(8 of the respondents indicated no problems# while %2.538 indicated that they

had problems and (.468 abstainin+ ,Table 4.%2 and $i+. 4.%2-

Fig"!"#4

Pr%be'+ C%*(er*i*g SEBI a+ a Capita Mar5et I*ter'e6iar)



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Tabe !"#7: Other SEBI Reate6 Pr%be'+ %& Capita Mar5et I*ter'e6iarie+

S. ature of problem umber 0ercenta+e

% "uction of shares ,0rice 7i++in+- % &.32

' >ed+in+ % &.32

1 Securities Transaction Ta* ,STT- % &.32

6 !ar+in and ross !ar+in % &.32

2 )en+thy client re+istration forms % &.32

5 o proper warnin+ systems 6 1.4%

( SEBI is =ictatorial ' %.3&

4 il 7esponses 36 43.2'

Total

%&2 %&&.&&


Fig"!"#7

Other SEBI reate6 Pr%be'+ %& Capita Mar5et I*ter'e6iarie+



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Table 4.%5 and $i+. 4.%5 reveals that even thou+h SEBI is doin+ its best in re+ulatin+ the

Indian apital !arket# there were still some shortcomin+s amon+st which the respondents

identified# amon+st them# the lack of an appropriate warnin+ system. "s shown on Table

4.%( and $i+. 4.%(# some of the respondents had some minor problems which needed

addressin+ by SEBI. Such problems were nonCpayment for shares# delistin+ of shares# nonC

transfer of shares# nonCrefund of Initial 0ublic :ffer ,I0:- money# sudden chan+es in mar+in

and poor accounts matchin+. Such +rievances were reported to SEBI individually. Aery few

were reported in batches ,Table 4.%4 and $i+. 4.%4-.

Tabe !"#9: Cie*t Pr%be'+ Re=$iri*g the A++i+ta*(e %& SEBI

S. ature of problem umber 0ercenta+e

% onCpayment for shares 2 6.3&

' =elistin+ of shares % &.34

1 onCtransfer of shares ' %.35

6 onCrefund of I0: money 6 1.3'

2 Sudden chan+es in !ar+in ' %.35

5 0oor "ccount matchin+ % &.34

( one %1 %'.(2

4 il 7esponses (6 ('.22

Tot %&' %&&.&&


Fig"!"#

9


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Cie*t Pr%be'+ Re=$iri*g the A++i+ta*(e %& SEBI


Tabe !"#!: The M%6e %& Rep%rti*g Pr%be'+ t% SEBI

S. !ode umber 0ercenta+e

% Individually 14 1(.'2

' In Batches %' %%.(5

1 il 7esponses 2' 2&.34

Total

%&' %&&.&&


Fig"!"#

!


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The M%6e %& Rep%rti*g Pr%be'+ t% SEBI


Tabe !"#/: The Nat$re %& SEBI’+ Re+p%*+e t% Pr%be'+


% Aery slow to react %2 %6.(%

' Slow to react '3 '4.61

1 Take immediate "ction %3 %4.51

6 o "ction taken ' %.35

2 il 7esponses 1( 15.'(

Total

%&' %&&.&&



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Fig"!"#/

The Nat$re %& SEBI’+ Re+p%*+e t% Pr%be'+


The majority of respondents believed that SEBI was slow to react to their problems. This fact

is revealed in Table 4.%3 and $i+. 4.%3. %6.(%8 of the respondents said that SEBI was very

slow to react to problems. '4.618 thou+ht that SEBI was slow to react and %4.518 revealed

that they received immediate reaction to their problems. The mi*ture of fastness and delays in

reaction indicated that SEBI carried out proper investi+ations before reactin+ to problems. "s

a result# SEBI is seen as an effective re+ulator of the Indian apital !arket ,Table 4.'& and

$i+. 4.'&-. 26.3&8 of the respondents thou+ht that SEBI is an effective !arket 7e+ulator#

while %5.5(8 thou+ht the opposite and '4.618 abstained.


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27

Tabe !"-.: Rati*g the E&&e(tie*e++ %& SEBI’+ Re+p%*+e t% C%'pai*t+

S. =escription umber

0ercenta+e

% Effective 25 26.3&

' ot effective %( %5.5(

1 il 7esponses '3 '4.61

Total

%&' %&&.&&


Fig"!"-.

Rati*g the E&&e(tie*e++ %& SEBI’+ Re+p%*+e t% C%'pai*t+



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Tabe !"-#: The T)pe %& S%$ti%*+ O&&ere6 b) SEBI t% C%'pai*t+

S.N Type Number0ercenta+e

1 Complete solution 311&.13

2 Partial solution 3411.11

3 None 3'.36

4 Nil Responses 3411.11

Tot 102%&&.&&


Fig"!"-#

The T)pe %& S%$ti%*+ O&&ere6 b) SEBI t% C%'pai*t+



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)ookin+ at the completeness of SEBI solutions to problems presented by apital !arket

Intermediaries# 1&.138 of the respondents said SEBI handled their problems and provided

complete solutions. 11.118 of them said they received only partial solution# '.368 of the

respondents received no solution at all and 11.118 of abstained ,Table 4.'% and $i+. 4.'%-.

oncernin+ problem lod+in+ and processin+ fee# 56.(%8 of the respondents said that no fee

was paid. %%.(58 of them said they had to pay for lod+in+ and processin+ of their problems#

while '1.218 of the respondents abstained ,Table 4.'' and $i+. 4.''-.

Tabe !"--: Pa)'e*t %& a Fee be&%re L%6gi*g a C%'pai*t 8ith SEBI


% es %' %%.(5

' o 55 56.(%

1 il 7esponses '6 '1.21

Tot

al

%&' %&&.&&


Fig"

!"--


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27

Pa)'e*

t %& a

Fee be&%re L%6gi*g a C%'pai*t 8ith SEBI


SEBI re+ulates the activities of apital !arket Intermediaries as well as the companies

they represent. )ookin+ at the number of clients who had received warnin+s from SEBI

for the violation of rules and re+ulations# it was revealed that 5.4&8 of those who received

warnin+s were companies and &.3(8 of them were Institutional Investors. 11.&%8 of the

respondents’ clients had not received any warnin+ from SEBI# while 23.''8 abstained

,Table 4.'1 and $i+. 4.'1-.


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Tabe !"-2: N$'ber %& (ie*t+ 8h% hae Re(eie6 >ar*i*g+ &r%' SEBI &%r the

Vi%ati%* %& R$e+ a*6 Reg$ati%*+

S. =escription umber

0ercenta+e

% ompanies ( 5.4&

' Institutional investors % &.3(

1 Institutional forei+n investors &.&&

6 one 11 11.&%

2 il 7esponses 5% 23.''

Tot

al

%&' %&&.&&


Fig""!"-2

N$'ber %& (ie*t+ 8h% hae Re(eie6 >ar*i*g+ &r%' SEBI &%r the Vi%ati%* %& R$e+a*6 Reg$ati%*+


In total# only 48 of the respondents’ clients had received warnin+s# that is# (.468 of the

respondents. 62.%&8 had no warnin+# while 6(.&58 abstained ,Table 4.'6 and $i+. 4.'6-.


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Tabe !"-3: N$'ber %& 8ar*i*g+ re(eie6 b) the &ir'+ &r%' SEBI &%r i%ati%* %& R$e+ a*6

Reg$ati%*+


% es 4 (.46

' o 65 62.%&

1 il 7esponses 64 6(.&5

Total

%&' %&&.&&


Fig""!"-3

N$'ber %& 8ar*i*g+ re(eie6 b) the &ir'+ &r%' SEBI &%r i%ati%* %& R$e+ a*6

Reg$ati%*+



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Tabe !"-4: N$'ber %& Cie*t+ 8h% hae Re(eie6 ?$6g'e*t+ &r%' SEBI &%r C%'pai*t+

L%6ge6


% Individual Investors 24 6&.42

' Institutional Investors 1 '.%%

1 Institutional $orei+n Investors &.&&

6 one 1% '%.41

2 il 7esponses 2& 12.'%

Total %6' %&&.&&


Table 4.'2 reveals the number of clients who had received jud+ment concernin+ complaints

lod+ed with SEBI. It reveals that 6&.428 of respondents received jud+ments for and on

behalf of individual investors. '.%%8 of respondents received jud+ment for and on behalf of

institutional investors. '%.418 of respondents did not receive any jud+ment and 12.'%8 of

the respondents abstained ,$i+. 4.'2-.

Fig""!"-4

N$'ber %& Cie*t+ 8h% hae Re(eie6 ?$6g'e*t+ &r%' SEBI &%r C%'pai*t+ L%6ge6


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Tabe !"-7: The Nat$re %& ?$6g'e*t A((%r6e6 t% Cie*t+ b) SEBI


% $avourable '4 '(.62

' ot favourable 5 2.44

1 il 7esponses 54 55.5(

Total

%&' %&&.&&


'(.628 of the respondents revealed that the jud+ments received from SEBI were favourable#

while only 2.448 of the jud+ments received were not favourable. " total of 55.5(8 of the

respondents abstained ,Table 4.'5 and $i+. 4.'5-.

Fig" !"-7

The Nat$re %& ?$6g'e*t A((%r6e6 t% Cie*t+ b) SEBI


The research reveals that the presence of SEBI in the Indian apital !arket has made the

Indian apital !arket a much improved place for securities’ tradin+. 64.&68 of the


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respondents indicated that there is much improvement# with 16.1%8 of the respondents

havin+ a view that the presence of SEBI just avera+ely improved securities’ tradin+. 1.3'8

of respondents believe that there has been no improvement# with %1.(18 abstainin+ ,Table

4.'( and $i+. 4.'(-.

Tabe !"-9: The E&&e(t %& the Pre+e*(e %& SEBI i* the I*6ia* Capita Mar5et


% !uch improvement 63 64.&6

' "vera+ely improved 12 16.1%

1 o improvement 6 1.3'

6 il 7esponses %6 %1.(1

Total

%&' %&&.&&


Fig" !"-9

The E&&e(t %& the Pre+e*(e %& SEBI i* the I*6ia*

Capita Mar5et



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Tabe !"-!: Rea+%*+ &%r M$(h I'pr%e'e*t

S. 7easons umber 0ercenta+e

% Transparency %3 '2.11

' Screen based tradin+ 2 5.5(

1 o defaulters for many years 2 5.5(

6 $low of forei+n investment % %.11

2 TD' settlement system 1 6.&&

5 Effective mar+in system 1 6.&&

( il 7esponses 13 2'.&&

Total

(2 %&&.&&


Fig"!"-!

Rea+%*+ &%r M$(h I'pr%e'e*t



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28

Table 4.'4 provides the reasons why the respondents think the Indian apital !arket has

+ained much improvement due to the presence of SEBI. "mon+st other services like Screen

based tradin+# the TD' settlement system and effective mar+in system# transparency came

first with a '2.118 of respondents pinpointin+ it as very necessary ,$i+. 4.'4-. >owever# the

respondents who feel that the presence of SEBI has only avera+ely improved the India

apital !arket has these to say %%.618 believed that SEBI is very slow in its reaction to

situations. %%.618 are of the opinion that SEBI is there only for lar+e companies# while

4.2(8 complaint about poor information dissemination. The majority# 54.2(8 of the

respondents did not make any comment ,Table 4.'3 and $i+. 4.'3-.

Tabe !"-/: Rea+%*+ &%r Aerage I'pr%e'e*t

S. 7easons umber

0ercenta+e

% Aery slow reaction 6 %%.61

' Benefits only lar+e firms 6 %%.61

1 Information flow is slow 1 4.2(

6 il 7esponses '6 54.2(

Total

12 %&&.&&



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Fig" !"-/

Rea+%*+ &%r Aerage I'pr%e'e*t


Tabe !"2.: Rea+%*+ &%r N% I'pr%e'e*t

S. 7easons umber 0ercenta+e

% o "ction taken on complaints % '2

' il 7esponses 1 (2

Total

6 %&&



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28

Fig"!"2

.

Rea+%*+ &%r N% I'pr%e'e*t


:nly one respondent was of the opinion that the presence of SEBI has not brou+ht with it any

improvement. This was a subjective rather than an objective view of the a++rieved persons

,Table 4.1& and $i+. 4.1&-. =espite this# most of the respondents were of the opinion that

SEBI was doin+ a job.

:n ratin+ the services of SEBI in its capacity as the Indian apital !arket 7e+ulator# %5.5(8

of the respondents were of opinion that SEBI was handlin+ the Indian apital !arket in a

very +ood way# that is# the proper formulation of apital !arket 7ules and 7e+ulations

,policies-. 15.'(8 of the respondents were of the opinion that SEBI’s services in the


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formulation of apital !arket policies were +ood services yieldin+ +ood results ,Table 4.1%

and $i+. 4.1%-. :n the whole# therefore# 2'.368 of respondents appreciated the services of

SEBI as +ood and necessary for the smooth runnin+ of the Indian apital !arket.

Tabe !"2#: Rati*g %& the +eri(e+ %& SEBI i* &%r'$ati*g Capita Mar5et P%i(ie+

,R@R0

S. 7atin+ umber 0ercenta+e

% Aery +ood %( %5.5(

' 9ood 1( 15.'(

1 "vera+e '( '5.6(

6 $air ' %.35

2 0oor 6 1.3'

5 il 7esponses %2 %6.(%

Total

%&' %&&.&&


Fig" !"2#

Rati*g %& the Seri(e+ %& SEBI i* &%r'$ati*g Capita Mar5et P%i(ie+ ,R@R0



37/50

:n ratin+ the services of SEBI in the handlin+ of investors’ complaints# %&.(48 of the

respondents stated that SEBI provided very +ood services# while '6.2%8 thou+ht that the

services are +ood. This means that a total of 12.'38 of respondents appreciate the work done by SEBI in the Indian apital !arket in handlin+ of investors’ complaints. >ere

13.''8 of the respondents were of the opinion that SEBI’s services of handlin+ investors’

complaint can only be rated as avera+e# '%.2(8 of the respondents abstained ,Table 4.1'

and $i+. 4.1'-.

Tabe !"2-: Rati*g %& the Seri(e+ %& SEBI i* the Ha*6i*g %& i*e+t%r+’ C%'pai*t+

S. 7atin+ umber 0ercenta+e

% Aery +ood %% %&.(4

' 9ood '2 '6.2%

1 "vera+e 6& 13.''

6 $air ' %.35

2 0oor ' %.35

5 il 7esponses '' '%.2(

Total

%&' %&&.&&


Fig"!"2

-


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Rati*g %& the Seri(e+ %& SEBI i* the Ha*6i*g %& i*e+t%r+’ C%'pai*t+


Tabe !"22: The a6e=$a() %& SEBI’+ R$e+ a*6 Reg$ati%*+ i* hepi*g the i*e+t%r+ t%

+%rt

%$t their i*e+t'e*t 6i&&i($tie+"


% Aery adequate %( %5.5(

' $airly adequate 6( 65.&4

1 ot adequate %4 %(.52

6 il 7esponses '& %3.5%

Total

%&' %&&.&&



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Fig"!"22

The a6e=$a() %& SEBI’+ R$e+ a*6 Reg$ati%*+ i* hepi*g the i*e+t%r+

t% +%rt %$t their i*e+t'e*t 6i&&i($tie+


Tabe !"23: SEBI + 'ea*+ %& E6$(ati*g the I*e+t%r+ a+ t% their

Right+ a*6 Obigati%*+

S. :pinion umber 0ercenta+

e% Seminars 2% '2.(5

' 0ress 7eleases 15 %4.%4

1 ewspapers 13 %3.(&

6 Television 12 %(.54

2 7adio %& 2.&2

5 othin+ 3 6.22

( il 7esponses %4 3.&3

Total

%34 %&&.&&



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:n the adequacy of SEBI’s 7ules and 7e+ulations in helpin+ the investors to sort out their

investment difficulties# %5.5(8 of the respondents thou+ht that SEBI was very adequate.

65.&48 thou+ht that SEBI was fairly adequate# %(.528 of the respondents thou+ht that SEBIwas not adequate and they were %5.5%8 abstained ,Table 4.11 and $i+ 4.11-.

The research revealed that SEBI was embarked in the process of educatin+ investors on their

ri+hts and obli+ations# when dealin+ with the apital !arket. The respondents su++ested that

investor education should be done throu+h the or+aniFin+ of seminars. This was closely

followed be the newspapers with %3.(&8 and press releases came third with %4.%48 rankin+

,Table 4.16 and $i+. 4.16-

The respondents advised the 9overnment of India to +ive SEBI more powers# both judicial

and administrative. 65.&48 of respondents advocated for more powers ,Table 4.12 and $i+.

4.12-. The +ivin+ of more powers to SEBI meant that its verdicts should be final and not

contended or repealed by any court of law.

Fig" !"23

SEBI+ 'ea*+ %& E6$(ati*g the I*e+t%r+ a+ t% their Right+ a*6 Obigati%*+



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Tabe !"24: Epert A6i(e t% the G%er*'e*t %& I*6ia ab%$t SEBI

S. "dvice umber 0ercenta+e

% Suspend its "ctivities 1 '.36

' 9ive it more powers 6( 65.&4

1 )et it stay as it is. 1' 1%.1(

6 il 7esponses '& %3.5%

Total

%&' %&&.&&


Fig" !"24

Epert A6i(e t% the G%er*'e*t %& I*6ia ab%$t SEBI


The above analysis has presented the survey from the capital market brokers. They have

clearly e*pressed their perceptions as to the performance of SEBI# in its capacity as the

capital market re+ulator


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SECTION B

INVESTORS’ PERCEPTION REGARDING THE PERFORMANCE OF SEBI IN

THE INDIAN CAPITAL MARKET

The precedin+ analyses presented the Stock Brokers’ survey about SEBI. Section B of this

chapter presents the survey of investors as consumers of the Securities and E*chan+e Board

of India ,SEBI- services. Their views have been e*pressed on a wide variety of issues

concernin+ their investment activities in the Indian apital !arket. Their views were

carefully analysed and presented# usin+ fi+ures and tables as seen below

Tabe !"27: D$rati%* %& Deai*g i* the I*6ia* Capita Mar5et ,I*e+t%r+0

S. =uration 7espondents 0ercenta+e ,8-

% % to ' years 16 64.2(

' 1 to 6 years %3 '(.%6

1 2 to 5 years 6 2.(%

6 5 to %& years 2 (.%6

2 !ore than %& years ( %&.&&

5 il % %.61

Total (& %&&.&&

S%$r(e: Fie6 A*a)+i+ ,-../0

Table 4.15 reveals that only %&8 of Investors had been investin+ in the Indian apital

!arket for more than %& years. (.%68 of Investors had been dealin+ in the !arket for %&

years# 2.(%8 for 5 years# '(.%68 for 6 years and 64.2(8 for ' years ,see $i+. 4.15-.


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2

Fig"!"2

7

D$rati%* %& Deai*g i* the I*6ia* Capita Mar5et ,I*e+t%r+0

S%$r(e: Fie6 A*a)+i+ ,-../0

Tabe !"29: Area %& the Capita Mar5et i* 8hi(h the I*e+t%r ha+ I*e+t'e*t

S. =etails 7esponses

0ercenta+e8

% 0S; Bonds % &.41

' Equity Shares 56 21.11

1 =erivatives 2 6.%(

6 )ife Insurance %( %6.%(

2 =ebenture Stock 1 '.2&

5 Savin+s Bonds 5 2.&&

( !utual $unds '% %(.2&

4 "ny other & &.&&

3 il 1 '.2&

Total %'& %&&.&&

S%$r(e: Fie6 A*a)+i+ ,-../0


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There are a variety of products in the Indian apital !arket. Table 4.1( reveals that most

investors preferred to invest in Equity Shares. 21.118 of investors preferred to invest in

Equity Shares. The second most preferred product was the !utual $unds# with %(.2&8 and

the third was )ife Insurance# with %6.%(8 ,see $i+.4.1(-. Equity shares are easily

transferable and they are therefore# attractive to many investors. SEBI is there to oversee that

the market moves smoothly and investors’ interest well protected.

Fig"!"29

Area %& the Capita Mar5et i* 8hi(h the I*e+t%r ha+ I*e+t'e*t

S%$r(e: Fie6 A*a)+i+ ,-../0


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2

Tabe !"2!: A'%$*t %& C$rre*t I*e+t'e*t i* the I*6ia* Capita Mar5et

S. "mount 7espondents 0ercenta+e8

% 7s 2#&&& G 2&&& %3 '(.%6

' 7s 2&&& G %&&&& %( '6.'3

1 7s %&&&& G %2&&& %& %6.'3

6 7s %2&&& G '&&&& %5 ''.45

2 7s '&&&& G '2&&& 6 2.(%

5 7s '2&&& and "bove 1 6.'3

( il % %.61

Total (& %&&.&&

S%$r(e: Fie6 A*a)+i+ ,-../0

The research revealed that on avera+e# investors in the Indian apital !arket had an avera+e

investment of 7s %# &&&&. " detailed analysis showed that 2.(%8 of investors own

investment of up to 7s '# 2&&& in the apital !arket# ''.458 of investors own investment

of up to 7s '#&&& %6.'38 own investment of up to 7s %#2&& '6.'38 own investment

of up to 7s %#&&&& and '(.%68 own investment of up to 7s 2&&& ,see Table 4.14 and

$i+.4.14-.

Fig"!"2

!


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2

A'%$*

t %&

C$rre*t I*e+t'e*t i* the I*6ia* Capita Mar5et

S%$r(e: Fie6 A*a)+i+ ,-../0

Tabe !"2/: I*e+t%r+’ K*%8e6ge %r hae Hear6 ab%$t SEBI

S. 7esponse 7espondents 0ercenta+e,8-

% es 52 3'.45

' o 2 (.%6

1 il & &.&&

Total (& %&&.&&

S%$r(e: Fie6 A*a)+i+ ,-../0

Table 4.13 reveals that 3'.458 of the investors have heard about SEBI ,see $i+.4.13-. They

understood the role of SEBI and why it was in e*istence.

Fig" !"2/

I*e+t%r+’ K*%8e6ge %r hae Hear6 ab%$t SEBI

S%$r(e: Fie6 A*a)+i+ ,-../0


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was the 7e+ulator of the Indian apital !arket. Aery few of them doubted the e*istence of

the 7e+ulator ,see $i+.4.6&-.

Fig"!"3.

The P%+iti%* he6 b) SEBI i* the I*6ia* Capita Mar5et

S%$r(e: Fie6 A*a)+i+ ,-../0

Tabe 3"3#: Opi*i%* 8hether it i+ Ne(e++ar) t% hae SEBI i* the I*6ia*

Capita Mar5et

S. 7esponse 7espondents 0ercenta+e,8-

% es 24 4'.45

' o %% %2.(%

1 il % %.61

Total (& %&&.&&

S%$r(e: Fie6 A*a)+i+ ,-../0


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!ost investors stated that in their opinion# it was necessary to maintain SEBI in the Indian

apital !arket as the 7e+ulator. This fact was revealed in Table 4.6% and $i+. 4.6%. It was an

indication that SEBI was doin+ its best to protect the investors and also re+ulatin+ the Indian

apital !arket as required ,see also Table 4.6' and $i+. 4.6'-.

Fig"!"3#

Opi*i%* 8hether it i+ Ne(e++ar) t% hae SEBI i* the I*6ia* Capita Mar5et

S%$r(e: Fie6 A*a)+i+ ,-../0


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Tabe !"3-: Rea+%* t% hae SEBI i* the I*6ia* Capita Mar5et

S. :pinion 7espondents 0ercenta+e8

% To solve problems and Eliminate

$ake Brokers

% %.61

' $ulfill Investors’ Transaction % %.61

1 To 7e+ulate and protect Investors %4 '2.(%

6 >elpful in the Investment ?orld ' '.45

2 0rovides an easy way of Tradin+ % %.61

5 $or 9rowth# ontrol and functionin+ ofthe market

1 6.'3

( It takes all necessary steps to re+ulatethe E*chan+e SE and BSE

' '.45

4 To check insider tradin+ % %.61

3 To check $raud % %.61

%& ontrols the market and eyes on

Stock E*chan+e

' '.45

%% Investors "wareness of !arket % %.61

%' To Educate the Investors and Brokers % %.61

%1 il 15 2%.61

Total (& %&&.&&

S%$r(e: Fie6 A*a)+i+ ,-../0

Sebi’s Performance the Perception of Brokers and Investors

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