It was about time, but regulation always follows two steps behind. We needed the Bombay Stock Exchange brokers to create a completely opaque system of trading where the average person had no chance of knowing the price before Securities Exchange Board of India (Sebi) was born to regulate the market and National Stock Exchange was created as a competitor. We needed a Harshad Mehta to know that some loopholes in banking needed to be plugged before the securities trading infrastructure exploded in our faces. We needed Rupalben for Sebi to partially fix the IPO market and be confident enough to say that it won’t happen again. And so on.
Thankfully, a major scam hasn’t broken out so far, but as everyone in the financial community knows, the weakest link in the financial services chain today is the distributor, who in the 10 square feet of space between him and the client, is wreaking financial havoc. Distribution is the last mile in the delivery of financial services to households and this mile is full of potholes.
Opinion in The Indian Express, June 22, 2007