Gold and real estate may be perceived to be the villains for taking away the domestic savings that could have otherwise come to the financial markets but UK Sinha,Sebi chairman,said that rapidly developing and growing grey market in the form of unregulated collective investment schemes is a worrying trend and called for a separate regulator to monitor this activity.
If you have to tackle illegitimate money being raised in this country you need the co-operation of the state governments. Perhaps the Central government can come out with one single regulator. It is a huge task and you need one single regulator, said Sinha while speaking at the Seminar on Investment Outlook 2013, conducted by Indian Merchants Chamber in Mumbai on Wednesday.
Narrating instances of companies that have raised money from ordinary citizens Sinha called for both the state and the Central governments to take a note of it as it is a serious matter now and cant be ignored. He said that that collective investment schemes are being run by people without being under any regulation. It is everyones responsibility. Products that are in the grey market and not in the legal system needs to be brought in the system. In that we need the help of the state governments,Central government and the entire investment community, said Sinha.
My worry is if these are not curtailed or checked people are going to lose money in large numbers which will lead to loss of credibility of the whole system.
Regulator looking at relief for RGESS investors
With a weak response to the six Rajiv Gandhi Equity Savings Schemes launched by fund houses that have not been able to manage the minimum collection of Rs 10 crore to be eligible to run the scheme,Sebi is now looking for a window where investors are not put at a disadvantage.
We are trying to find a process whereby taxpayers are not put to disadvantage because of factors beyond their control, said Sebi chairman UK Sinha.