``FIIs and UTI are the only major players in our market - large buy or sell orders from any one of them can affect the market sentiment and this is not desirable. We have to create a situation wherein no player can dictate the direction of the market. To meet this objective, we feel banks should be allowed to invest at least one per cent of their deposits in the capital markets. That in itself will release around Rs 8000crore. LIC, which is now allowed to invest only 5 per cent (which is close to Rs 700 crore) of its funds in equities, should be permitted to put in at least 15 per cent. Similarly, GIC should be allowed to invest 30-50 per cent of its investible funds in the capital market.''

Apart from releasing a voluminous amount of money into the system, it will lead to a more stable market. According to Rathi, it is not enough to make such presentations only to the government ``because the latter cannot tell LIC what it has to do''. He said BSE will soon make a similar presentation to the LIC in order to highlight the advantages of investing in equities. ``We plan to initiate talks with GIC and pension funds, too,'' Rathi said. As insurance companies hold long-term funds, it should not be difficult for them to earn good returns in equities. Rathi's other suggestions included deployment of at least 5 per cent of pension funds into the market and allowing other FIs to invest at least 2 per cent of their investibleresources in equities.

Rathi also felt that 10 per cent of PSU divestment should be done through the public route before initiating any strategic sell-off to FIIs. ``This will not only help get a better price discovery and, hence, improve valuations, but will also help improve the corporate governance of these PSUs (thanks to the shareholder pressure).'' Rathi said another way to boost the market would be to allow employees to invest at least 20 per cent of their PF contribution in the capital market through appropriate schemes. ``This will bring in funds and give a big push to the mutual fund industry,'' he added.

Instead of allowing 100 per cent parent holding in any Indian venture by a foreign company, the government should think of earmarking at least 24 per cent of the equity in such a venture to the Indian public. ``As most foreign companies are good dividend payers and get a good discounting in the Indian market, the public should get a chance to invest inn such shares,'' Rathi noted, adding thatmost countries abroad follow such a pattern. Criticising the 25 per cent public shareholding restriction, Rathi said there was no justification for following the same rule for a Rs 100 crore company and a Rs 5 crore company. ``What is more important is that a company should offer at least 250,000 shares with a market capitalisation of Rs 10 crore at the time of going public,'' he added.

BSE'S NINE-POINT PLAN