The Chairman
Securities & Exchange Board of India
Mumbai

Dear Mr Damodaran:

In what is probably your first major decision since joining Sebi as its chairman recently, you have deferred the deadline for individuals to conform to the new regulations requiring them to quote a MAPIN number for all securities transactions over Rs 100,000. The deadline, which was earlier set at April 1, 2005 now stands extended to December 31, 2005.

The press release from Sebi states that this step is being taken in view of "representations and feedback from the above "specified investors" on the difficulties faced by them in adhering to the time line of March 31, 2005".

We applaud this decision and thank you for showing that Sebi is capable of responding to the needs and concerns of the retail investor.

We however would urge you to also reconsider the Rs 100,000 single transaction limit and increase it substantially. Our argument is as follows:

Individuals do not only invest out of regular income. They also invest from accumulated wealth. We, as financial planners, find numerous instances where retail investors have accumulated wealth by saving and investing wisely. Their securities (stocks and mutual funds) portfolios can be anywhere between Rs 500,000 to Rs 1,000,000.

These investors, even though their portfolios may run upto Rs 1,000,000, are still retail in nature. They usually have well diversified portfolios containing a mix of blue chip stocks and, increasingly, a wide variety of mutual funds. When they restructure their portfolios or redeem to meet needs, they will still be required to quote a MAPIN number (over and above the PAN number).

The investor in question is mostly salaried/small trader, who files his returns diligently, pays his taxes and is definitely not involved in manipulating a $ 250 bn market {Rs 12 - 14 lakh crores (Rs 1.2-1.4 million)}.

We are encouraged by your decision to defer the date for implementing the MAPIN requirement for retail investors. We urge you to also reconsider the Rs 100,000 limit that has been set.

We hope that this is just one of the many steps you plan on taking to bring the retail investor back in the securities markets.

Thank you,
Warm regards,

A retail investor