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Group suggests measures to increase investor confidence

The informal group on capital markets, headed by N Acharya, advisor in the finance ministry, has recommended that the listing requirements of stock exchanges be made more stringent, and the bourses more accountable, to create investor confidence.

The group suggested the creation of an effective institutional arrangement for protecting small investors. It called for better corporate governance on the part of the industry and said accounting norms should be made uniform -- international standards should be adopted for the purpose.

The domestic market could be opted for part of the public sector disinvestment being done through the GDR route, the group said, adding that an adequate amount of credit should be made available to market makers.

It said derivative trading should be introduced quickly in order to provide hedge instruments for institutional players.

The group recommended that the depository mode of transactions be popularised. The possibility of new depository should be explored as a means of reducing issues.

UNI