Sebi’s Ananth Gopalakrishnan allays’ investors concern on Demat accounts amid bear markets

Talking about Sebi’s view of the industry growth, Gopalakrishnan said, “SEBI has three fundamental mandates as part of the SEBI Act. We are charged with investor protection, market development, and market regulation. Essentially, if you put all three together, our mandate is to ensure sustainable capital formation.”

While easing investors’ concerns regarding dematerialisation, Gopalakrishnan said, “a lot of the data that we ask for will become redundant if everything is in demat form. If your liabilities are in demat, if your assets are also eventually on demat, I don’t need to ask you on anything. It’s all available with the depository.”

He added, it ticked all the boxes for sponsors, regulators, and investors, as it facilitates investors’ ease of doing business, disclosure and clarity, and regulatory oversight and aligns with the goal of Digital India.

Further, giving his personal views on the accredited investor regime and the QIB regime for institutions, that is, when those could be used as criteria for entry into large value funds, Gopalakrishnan said, “I would much rather we moved mandatorily to an accredited investor (AI) model than going through this 1 crore, 2 crore, 3 crore, 5 crore kind of a number.”

He also said, “The rationale I’m using is, I think, in line with what’s internationally best practiced, which is why we want to start off with people who declare themselves to be financially literate.”

Moreover, he added that the number of accredited investors is 200, but the actual number of retail investors in AIF goes into the 1000s.

On Wednesday, markets tumbled for the fourth day in a row, seeing their biggest losing streak in five months. Sensex has erased its psychological level of 60,000 mark and the Nifty 50 was toppled below 17,600. That being said, Sensex and Nifty 50 closed on their lowest reading since October 19 last year.

Sensex shed 927.74 points or 1.53% to end at 59,744.98. While Nifty 50 dipped by 272.40 points or 1.53% to close at 17,554.30.

With Sensex falling below 60,000 levels, investors’ wealth of ₹3,87,228.19 crore has been eroded on Wednesday.

On BSE, there are nearly 12.55 crore registered investors as of February 22, 2023.

Gopalakrishnan is a Whole-Time Member of the Securities and Exchange Board of India (SEBI). At SEBI, he looks after the Market Intermediaries Regulation and Supervision Department (MIRSD), Alternative Investment Fund and Foreign Portfolio Investors Department (AFD), Integrated Surveillance Department (ISD), Department of Economic & Policy Analysis (DEPA), and Information Technology Department (ITD). He is also, at present, a Member of the Board of Governors of the National Institute of Securities Market (NISM).