Addressing a seminar on capital markets, Mayya said ``intermediaries will eat into the gains that would otherwise be available to investors.'' The former BSE executive director said ``avoid intermediaries, sell directly to retail investors at a discount and you will see the offer oversubscribed.''He pointed out that it is important to spread the shareholding across a large number of investors. ``It is necessary to distribute 100 to 200 shares per investor among a large number of investors,'' he said.

Mayya was strongly against the idea of using a special purpose vehicle, wearhousing or anyother form of intermediation in the disinvestment process.Mayya who raisedthe issue of improving liquidity in the stock markets said the process of dematerialisation has to pick up at a much faster rate.

``Every broker should be a depository participant,'' if the process of dematerialisation has to grow, he pointed out. Mayya emphasised that the cost to the investor in dematerialisation should be zero. ``The cost of dematerialisation has to be borne by the issuer and not the investor,'' he emphasised.

This, he said, was important to remove the mental block among retail investors. ``Why should an investor part with his securities and pay a cost too. The investor would prefer to keep the securities in his custody,'' he pointed out.

Mayya said that rolling settlement was compulsory, but it should be introduced only in the demat segment and not in the physical segment. ``We don't have the kind of infrastructure required to handle rolling settlement. In the present circumstances, this will mean a sharp drop in trading volumes,'' he added.