Calling for revamping of the capital market, the chamber in a statement said the practice of standard price should be abolished for shares and pricing of new issues be through book building or auctions. "Initial public offerings (IPOs) should be subject to sound market-based or performance-related entry barriers. Private placements should be encouraged and standardised," it said adding that lowering of equity premia should be allowed by introducing index futures and options.

Asking the Securities and Exchange Board of India (SEBI) to relax regulatory requirements for reviving the market, it said the board should work out listing norms aimed at finding long term survivors. "A market for global depository receipts (GDRS) should be set up in India wherefresh issues of GDRS could be permitted, the chamber suggested.

According to FICCI, regulators should restrict themselves only to prevent intermediaries from misusing investors' money and the investor should be allowed to choose his investment products and intermediaries.

The Reserve Bank of India should enable banks to package their loans and investments into transparent packages with definite maturity, return and default risk for offering to the personal investors, FICCI said.

Financial Institutions should offer more equity and less of debt, as they have currently over-leveraged the Indian corporate sector, it said and added that the ownership and management of FIs needed to be changed.

Calling for investors protection funds and clearing houses to reduce the risk on the part of small investors, it suggested that tax-payers be allowed to open an investment portfolio with an intermediary including banks and FIs. They should be allowed to invest in it without any limit but withdrawal should be allowedonly under exceptional circumstances and such investments should be allowed income tax and capital tax incentives, the chamber said.

Further, all investment income should be deductible as costs by the company that pays it, tax free in the hands of financial intermediary and should be subjected to a low tax rate in the hands of investors, it added.

For boosting investor confidence, FICCI said dematerialisation could prevent problems like bad deliveries, postal pilferage and fake share certificates suggesting a low cost wholesale market for telecom services and more free inter-exchange competition, electronic cash holding and transfer facilities.

BSE action
MUMBAI: The Bombay Stock Exchange (BSE) has filed winding up petition against five companies for their failure to attend the investors complaints and to pay the listing fees dues which exceeded Rs 50,000. The companies are Amrut Industries Ltd, Atash Industries Ltd, Jayanti Business Machines Ltd, Vijaysharee Capial and Finance Ltd andMadhumilan Fincorp Ltd, a BSE release said.