We are the investor community, representing the traders and investors. We voice the concerns of the trading community in the financial markets on this platform. There have been many events in the past that have directly or indirectly affected the investors. We have made sure that our voice is heard and resonates with the authorities.
Investors would be aware that the recent Securities and Exchange Board of India (SEBI) circular dated 20.07.2020 imposes certain restrictions on peak margins. Leverage or margins have been illegally around from time immemorial. Cutting the margins out of the equation in the financial markets will disturb the foundation of the markets. We collectively stand against the recent circular floated by (SEBI) regarding peak margin restrictions. The decision was taken by the SEBI directly impacts the volumes, and hence the business, in the financial markets and the livelihood of the people linked to the markets.
Wisdom Capital, a leading stock brokerage firm headquartered in Noida, raised voice against the new guidelines; Wisdom Capital rightfully maintains that the new guidelines will pull the volume down substantially. Many investors and traders share the view held by Wisdom Capital; the company is best known for introducing the concept of discount brokerage, and technology-enabled online trading in the industry. It is evident that Wisdom Capital single handedly went around and filed a writ petition in the Delhi High Court against SEBI’s new circular. There have been no such cases in the media that predate Wisdom Capital’s plea in the courts. A number of investors and brokers have gained courage and are doing their bit after they witnessed the response of the Delhi High Court: to notify and seek a reply from SEBI.
Investors found it comfortable working in the financial markets after the guidelines and recommendations made by Prof. J R Varma Committee. However, the new circular impacts trading gravely, as traders and investors are persuaded to maintain a minimum upfront margin in their accounts at all times during the day.
The investors/traders are not convinced by the recent SEBI circular, as it has several loopholes that directly hamper the liquidity and, therefore, the livelihood of the people involved in the trading activities. Moreover, there were no benchmarking reports or best practises which were evaluated before issuing such a circular. Nowhere in the world would one see such drastic measures taken by the regulators. Our question is: Are they trying to take away the mojo of the markets? Thus, we strongly support Wisdom Capital in its effort to challenge SEBI’s decision. If need be, we shall take legal recourse ourselves.