Bhatia also spoke about encouraging investor participation via REITs and Invits
The Securities and Exchange Board of India (SEBI) is focused on ensuring that our markets are not only efficient, but also equitable for all participants, Ashwani Bhatia, whole-time member, SEBI noted at the Morningstar Investor Conference in Mumbai on October 22.
Despite this positive trend, concerns were raised about the growing participation of retail investors in more complex and risky instruments, particularly derivatives. Bhatia noted that investors should be extremely careful while investing in this segment.
“If you are a first time investor don’t look at trading and making money through F&O. A good way would obviously be investing through mutual funds and direct investing as well,” he suggested.
Currently, retail participation in the securities market has seen a significant growth, surging from 4.1 crore demat accounts in 2020 to 17.5 crore as of September 24.
This growth, Bhatia noted, has increased on the back of growth in mutual fund assets, which have grown from 23.8 lakh crore to 67.1 lakh crore over the past five years.
“This growth has been driven by strong market performance and the realization that mutual funds offer stability and diversity,” he said.
SEBI, he noted, has been actively enhancing financial literacy through targeted programs aimed at various demographics, including students and women. “We have conducted over 25,000 investor awareness programs across the country in the past year,” he said.
In addition, the bond market is gaining traction. “We are committed to making debt markets more accessible and transparent,” he noted, highlighting a reduction in the minimum investment requirement for bonds.
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Bhatia also spoke about encouraging investor participation via REITs and Invits. REITs, he noted are “a hybrid product offering returns of equity and the fixed income, something in between.” This balance, he explained makes REITs particularly attractive for retail investors seeking to diversify their portfolios.
Bhatia noted that they want to ensure that their goal is to ensure that retail investors can participate in wealth creation without falling prey to speculative trading.