The government on Wednesday appointed five new members to the High Council of Securities and Exchange, the capital market decision-making body.
The new members include three financial experts, namely Mirfeiz Falah-Shams, Ali Saeedi and Ahmad Shabani, a commodity exchange expert, Rasoul Sa’di, and energy exchange expert Ali Emami, the Securities and Exchange News Agency reported.
Soon after the changes the council met vice president for economic affairs, Mohsen Rezaee.
Rezaee said the government is determined to boost the stock market and protect retail investors, underscoring the need to restore retail investors’ trust in the bourse.
Pointing to the gradual traction of investment in the share market among the public, he said its contribution to funding the economy has increased from 10% ten years ago to 20% now.
“This is not the ideal and the capital market share could increase up to 40%,” under the proper conditions, he was quoted as saying by IRNA.
“The prerequisite to fulfill this goal is to restore the people’s trust in the capital market.”
Rezaee recommended the council “to be sensitive to protecting the interest of retail investors.”
Commenting on the new makeup of the council, the Economy Minister Ehsan Khandouzi said they are “professional and prominent”.
In a note posted on his social media account on Wednesday, Khandouzi outlined measures to revive the struggling share market, implying that changes in policymaking body is in tandem with the government’s efforts to support the capital market.
“Appointing informed experts to the High Council of Securities and Exchange is a sign of support to stock market,” he wrote.
To-Do List
Ending monopolies, employing new financial instruments and promoting primary markets are and should top the to-do list of the council, he stressed.
In financial terminology, the primary market is a venue where companies sell new stocks and bonds to the public for the first time, such as via initial public offerings (IPOs).
Khandouzi emphasized the need to “avoid mandatory pricing [for products of listed companies] and prevent interference in stock prices.”
Mandatory price setting by the government has been a topic of hot debate among government officials, shareholders of listed companies and capital market authorities. Policy and decision makers argue that setting price ceilings help reduce the final price of products in the domestic market and support end consumers.
Stock market authorities, however, insist that it is incompatible with competitiveness and market mechanisms where demand and supply determine prices. They say shareholders whose products are priced by government market regulators are the main victims of mandatory pricing.
The volatile share market has been grappling with bearish trends that began after the price bubble burst in the summer of 2020 and non-stop selloff swept across most share categories that has continued to date.
