Sebi Chairman cautions buyers towards ‘lure of unrealistic returns’

Securities and Exchange Board of India (Sebi) Chairman Ajay Tyagi on Sunday cautioned buyers towards getting lured by unrealistic returns and guarantees which can be “too good to be true”.
“Investors should be careful against getting carried away by the lure of unrealistic returns in the securities market,” Tyagi mentioned whereas addressing the India International Trade Fair. Sebi is arising with an Investor Charter for defense of buyers’ pursuits within the Indian securities markets, he mentioned.Stock market valuations have already touched new peaks and corporations are lining up with IPOs to lift funds from buyers.
“Many a time, undesirable elements take advantage of the gullible investors by making promises that are ‘too good to be true’. Investors are advised to be cautious of such offerings,” the Sebi Chairman mentioned.
According to him, the very first thing the buyers want to know is that any monetary funding comes with a set of dangers. So, it is crucial that the buyers are cognizant of the dangers concerned within the product they’re investing in and of their risk-taking means. If they aren’t in a position to assess the suitability of a specific monetary product, it could be wiser to stay away from it than going the incorrect method, he mentioned.
In addition to the Investor Charter of Sebi, separate investor charters have been developed by registered intermediaries, regulated entities and asset administration firms, he mentioned. “These investor charters aim to create awareness among investors about different services being provided to them, timelines related to various services like investor grievance redressal mechanism, their rights and responsibilities and dos and don’ts of investing in securities market,” Tyagi mentioned.

From round Rs 120 lakh crore on the finish of 2016-17, market capitalisation has now virtually doubled to Rs 230 lakh crore. Turnover within the fairness money market and derivatives market additionally witnessed a major leap. Average month-to-month fairness money market turnover elevated from Rs 8 lakh crore in FY2019-20 to greater than Rs 15.5 lakh crore this FY until October 2021, he mentioned.
On the fairness derivatives aspect, the corresponding turnover figures primarily based on premium worth had been Rs 19.0 lakh crore in FY2019-20, which elevated to round Rs 28.4 lakh crore on this FY until October 2021. The AUM of mutual fund trade has virtually doubled from Rs 21 lakh crore in 2017-18 to Rs 37 lakh crore as on October 31, 2021. Tyagi mentioned participation of retail buyers in securities markets has seen a major rise, particularly within the final two years, which is obvious from the rise in variety of demat accounts, mutual fund folios and variety of SIPs. In 2019-20, on a median, 4 lakh new demat accounts had been opened each month which elevated to over 26 lakh monthly within the present monetary yr, he mentioned.
“If we look at number of mutual fund folios, in the beginning of FY 2019-20, total number of folios were 8.25 crore, which increased to 11.44 crore as on October 31, 2021,” he mentioned. With regard to SIP, whereas on a median round 52 lakh SIPs had been added over the last two monetary years, already round 75 lakhs have been added through the first six months of this monetary yr.