The Hindu Business Line : NRIs urge SMILE to provide trading platform

NON-resident Indians (NRIs) have urged the Securities Markets Infrastructure Leveraging Expert Task Force (SMILE) to provide a trading platform to enable participation in the secondary market and also called for a host of measures to boost investments.

A memorandum has been submitted Dr P.J. Nayak, Chairman of SMILE, by Pravasi Bandhu Welfare Trust, a UAE-based NRI welfare organisation.

Mr K.V. Shamsudheen, Chairman of the Trust, pointed out in the representation that despite the huge remittances by NRIs, they have been left to fend for themselves in a quagmire of indifference and restrictive regulations.

He indicated that the capital market should play a critical role in canalising NRI remittances into productive investments. "The rules are not flexible enough to provide the NRIs with easy access to secondary markets in India."

The Gulf region represent the largest concentration of NRIs in the world, but currently, participation by these NRIs in the secondary market is severely inhibited in the absence of easy access to the trading platform of the exchanges.

The law in all Gulf States requires that foreign entities set up business establishments in the region only in collaboration with a local partner. The US and European stock exchanges have already established their presence in the Middle East markets through their members who have tied up with locally regulated companies to offer trading facilities to investors in the region.

Indian stock exchanges should allow members to collaborate with entities in the Gulf region who comply with local regulatory requirements to offer screen-based trading facilities to NRI investors, the statement said. The Trust also referred to the logistical problems associated with investing in IPOs, including non-receipt of application forms on time, due to absence of reliable channels and the need to go integrate IPO processing with the depository thereby reducing paperwork.

It added: "Most of the investors who subscribed to the spate of IPOs during February-March 2004 are yet to receive their refunds, more than 4 months after the close of the offers. Neither has a mechanism been put in place for responding to queries from NRIs or addressing any of the problems faced by them."