MC Inside Edge: Save one's golden name from fraudsters, warning bell rings loud for SME IPOs, F&O participants continue to be on tenterhooks

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When your name is worth its weight in 'gold'

Impersonation and cyber frauds have become quite common nowadays and everyday one hears stories about people getting defrauded by cyber scamsters. Many institutions are getting impacted and the latest one to face the brunt is a global financial powerhouse whose name, many believe, is worth its weight in “gold”. The gravity of the matter can be gauged from the fact that the financial major was forced to issue a public statement, warning the general public to “exercise extreme caution” as fake websites and social media groups using the brand’s logo etc have come up and trying to convince people into investing in fraudulent schemes. Gold does come with a lot of glitter, or litter in this case.

Action never ends in the SME IPO segment

The average size of an SME IPO may well be a fraction of a mainboard issue but in terms of action and excitement, it is in multiples of their larger counterparts. While the regulator and exchanges are closely monitoring the segment, potential issuers and bankers operating in the SME segment are spooked by a recent development. On Monday, BSE directed that the entire proceeds of a recent SME IPO to be kept in an escrow account till complaints against the company are resolved “satisfactorily”. The exchange even went to the extent of postponing the listing date of the company, which would have definitely disturbed the strategy of many who would have been looking at making a quick buck by way of listing gains. This surely is a big warning for all SMEs looking to list in the future.

Would the tribe of retail options sellers vanish?

Discussions around the discussion paper by Sebi on F&O trading just doesn’t die down! The regulator received as many as 6,000 responses from market participants on the paper that was essentially aimed at tightening the bouquet of F&O products. While the final framework is yet to be announced, market players are already a worried lot. A separate analysis by Sebi showed that nearly 90 percent of the traders lose money in derivatives but many in the market believe that if the proposals put forth by the regulator in the discussion paper are finalised then the share of loss-making traders could only go up. They believe that the proposal of increasing the contract sizes for options could drive profitable retail option sellers out of the market. While the market is dominated by retail option buyers, a dearth of retail option sellers could disturb the market ecosystem, they say.