According to sources, the Securities and Exchange Board of India (Sebi) plans to issue regular ‘risk factor disclosures’ on market trends, including surges and collapses, in a global first to help investors make the right decisions by learning from the regulator’s insights.
The move, which is still in the early stages of discussion, could help investors avoid the herd mentality that has been particularly visible in recent years, beginning with large-scale selloffs when the pandemic hit the world in early 2020, followed by a sharp surge in buying of stocks without understanding the fundamentals and largely on the basis of get-rich-quick stories, and then subsequent losses.
The recent losses suffered by investors in a large number of IPOs, as well as the highly complicated futures and options segment of the capital market, have been particularly significant.
“Though investors have seen a consistent pattern play out in every cycle, that is, everyone rushes to buy shares when the going is good and then panic-sells when a crisis strikes. The fundamentals of capital market investing are constantly thrown out the window, and one major reason for this is a lack of truly independent insights “a senior official stated