Read on Twitter
Webseries "scam" has captured the imagination of people depicting how Harshad Mehta gamed the system. While people when talk about 1992 scam, they normally refer to equities scam.
But those who can read between the lines, it was as much an equity scam as govt securities scam.
Hopefully, people can refer it now better after the series. https://twitter.com/meandmarkets/status/1089120972886560769?s=20
Hopefully, people can refer it now better after the series. https://twitter.com/meandmarkets/status/1089120972886560769?s=20
It was only after the scam, both equities and govt bond market saw a slew of reforms by @SEBI_India and @RBI. In fact, SEBI actually got borne after the scam only. Till then it was a "still" born baby.
Until 1992, both equities and bond market was big boyz club. Entry was restricted to both market and one need to have contacts to get access.
Looks so unrealistic, atleast for equity.
Looks so unrealistic, atleast for equity.
Thankfully, in last 28 years, while equity market has got largely democratised but bond market is still largely the big boys club - out of bounds for retail.
Try investing in direct bonds in individual capacity and will get to know how difficult it is. You will feel that you are still in 1990s and not in 2020.
Many of us associate that NSE was launched after the scam to break brokers monopoly at BSE.
Yes...it was, but also to bring reform in bond market. Infact the first segment to get launched on platform was WDM (Wholesale Debt Market) and not equity. Don't be surprised.
Yes...it was, but also to bring reform in bond market. Infact the first segment to get launched on platform was WDM (Wholesale Debt Market) and not equity. Don't be surprised.
Possibly, govt and regulator wanted to democratize the bond market first and equity later but it never happened.
Why?
Unfortunately, it has more to do with regulatory turf war than anything else.
Why?
Unfortunately, it has more to do with regulatory turf war than anything else.
While equity market under fledgling SEBI grew from strength to strength, in terms of accessibility and transparency, bond mkt remained a big boyz club with limited access for people outside of institutions.
SEBI introduced electronic trading in 1990s when people out of metro cities had not even seen computers, and regular power supply was still a challenge. Shares moved from physical to demat, settlement cycle was shortened from 15 to 2 days and badla was replaced by F&O.
Reform proces didn't stop there. The big change came when SEBI allowed internet/mobile trading followed by interoperability, delivery against F&O and recently pledge/re-pledge of shares, to protect investor.
Good for equity market that SEBI is not stopping at these and now looking pro-actively to further reduce the settlement cycle to T+1 and extend trading hours as well.
Ever thought that why a regulator which has been so successful on equity, could not succeed in corp bond market.
IMO, it has more to do with democratization of govt bond market than anything else. You cannot develop corp bond market without having a liquid govt bond mkt.
IMO, it has more to do with democratization of govt bond market than anything else. You cannot develop corp bond market without having a liquid govt bond mkt.
Hopefully, all stakeholders (govt and RBI) realize this, esp. during a time when govt really needs to develop new source of savings to absorb ever increasing supply of bonds.
It is not so difficult. Regulators need to look beyond regulatory turf and let bonds trade in demat form and let secondary market trading develop on exchanges as well, along with NDS-OM.
And finally can't ignore the power of retail. Who would have thought that one day, retail can give the institutional players a run in equity. Today, retail is the largest in both cash segment and F&O in terms of turnover.
Who knows in 10 years, retail may be one of the largest in bond as well. But for all that to happen, demat and democratization of bond market has to start YESTERDAY.
