The Securities and Exchange Board of India (SEBI) is considering issuing regular ‘risk factor disclosures’ on market trends. The regulator hopes to help investors make decisions by periodically releasing more information and announcing its oversight. Thus they will be freed from the Gadria flow mentality. It is agreed that these advertisements will focus on the behavior of investors over a specific period of time, focusing on profit or loss and giving priority to those segments of the market that are making profit or loss.
Perhaps this is being done because some initial public offerings (IPOs) have suffered huge losses in recent times. Derivatives have also suffered. This idea has both advantages and disadvantages. On the positive side the market regulator has access to a lot of data which, not publicly available, can analyze this data more deeply and more accurately and provide a more in-depth view which can certainly help investors by sharing more data transparently.
However, the market regulator strives to create a level playing field for all investors with high trading performance, transparency, equal access to price sensitive information and smooth operation of financial exchanges. All publicly traded companies, market-driven financial institutions and market infrastructure, including share and commodity exchanges, must submit disclosures about their operations, policies and future strategies.
The regulator has worked on strengthening standards of business conduct and disclosure requirements for listed companies but cannot interfere in the decision-making process of investors. He should collect as much information as possible from business organizations. SEBI has suggested specific steps.
If most investors are convinced that SEBI is pointing to a particular risk or highlighting a particular opportunity, people are likely to act unilaterally. Interested parties wish to influence such information. In such cases there will be intense lobbying to exert influence. For example, it can be assumed that the disinvestment opportunity of a large public sector company may be subject to pressure from government sources, which is also a primary reason that the market regulator is an independent statutory body and has little say over market trends.
If SEBI decides to make more data public and give investors a better view of the financial situation, that would be a good thing but the analysis and possible interpretation of such data should always be left to the investors.