Sebi's market risk factor disclosures will generate detailed datasets: CPAI

Commodity Participant Association of India (CPAI) on Monday said capital markets regulator Sebi's planned move on market risk factor disclosures will generate detailed datasets.

According to sources, the regulator is planning to issue regular 'risk factor disclosures' on market trends, including surges and collapses, to help investors make right decisions by learning from the regulator's insights.

The move, which is still in a preliminary stage of discussion, can help investors avoid a herd mentality that has been particularly witnessed during the last couple of years starting with large-scale selloffs when the pandemic hit the world in early 2020, followed soon by a sharp surge in buying of stocks without understanding the fundamentals and largely on account of get-rich-quick stories and then subsequent losses.

"We at CPAI, wholeheartedly welcome this step. Sebi is best placed to take a holistic view of the market place and share it with investors and new retail investors have been participating in the market at a faster clip than before, especially during the last two years. They are specially the ones who are bemused by the volatility in the market," Narinder Wadhwa, National President of CPAI, said.

However, it should be beyond mere do and do not and standard statements, and that has been more or less the template till now. It should talk about the economy, its macro, tailwinds and headwinds, he said.

This step will help investors get some detailed datasets, that too from the regulator and not only from their wealth managers. The rationale that disclosures are made and to tell the market participants how those disclosures should be made, Wadhwa added.