Emphasizing the importance of investor awareness and personal responsibility, BSE Managing Director and CEO Sundararaman Ramamurthy cautioned that regulations alone cannot fully safeguard investors unless they take proactive measures while investing.
Ramamurthy stressed the significance of understanding the assets in which one invests, highlighting the need for investors to be vigilant and well-informed to protect their interests in the market.
He criticized the prevalent tendency among investors to rely on rumors and hearsay rather than conducting thorough due diligence before making investment decisions, drawing a parallel to scrutinizing a vegetable before purchase.
Addressing regulatory expectations, Ramamurthy pointed out the common practice of blaming regulators for investment losses while taking personal credit for market successes, underscoring the need for investors to take charge of their financial well-being.
During a speech at the Calcutta Chamber of Commerce, Ramamurthy advised retail investors, especially those lacking market expertise, to opt for mutual funds as a safer investment route, recommending broad-based or large-cap funds to diversify risks.
Encouraging early investment among women and young individuals, the BSE CEO highlighted the untapped potential of India’s SME sector, noting the limited number of SMEs listed on the stock exchange compared to the sector’s actual capacity.
He urged more small and medium enterprises to consider going public as a means to raise capital, expand their operations, and unleash their full potential in the market.
Responding to concerns about potential manipulation in SME listings, Ramamurthy acknowledged the risk of fraudulent activities like pump-and-dump schemes, despite regulatory oversight, and mentioned BSE’s trial use of AI and large language models to scan IPO documents for suspicious areas.
Ramamurthy reiterated the importance of investors understanding the businesses they invest in and conducting thorough due diligence to mitigate risks and make informed investment choices.
In conclusion, he reminded investors that safeguarding their investments requires active participation and informed decision-making, emphasizing that personal responsibility plays a crucial role in protecting one’s financial interests in the market.