The new managing director of Securities and Exchange Organization on Saturday outlined plans to improve the struggling capital market.
Majid Eshqi said the regulatory body will concentrate on its primary task of expanding the market, the Securities and Exchange Organization quoted him as saying.
“It is crucial to focus on issues such as increasing the role and contribution of the capital market in funding the domestic production sector,” he said.
Among other things, this must be accompanied by efforts to diversify financial instruments, improve transparency and disseminate financial information, scrap cumbersome regulations, reform procedures and boost technical structures, Eshqi stresssed.
As the organization in charge of supervising the capital market, the SEO will move toward “an inclusive and operational oversight.”
Strong monitoring will help identify misdemeanors and facilitate the process of investigations and penalization, he added.
“This will be done by creating interactive mechanisms using innovative technologies,” he said without elaboration.
To improve the supervisory mechanisms, the regulator needs to set up a “comprehensive risk management system and improve corporate governance”.
He said the SEO is determined to “restore discipline to the flow of information” in the share market by expanding data “gateways and information-publishing platforms.”
By doing so “we will be able to realize goals set to boost investment in the bourse and restore the investors’ trust.”
Eshqi was appointed as the SEO head by the High Council of Securities and Exchange on Wednesday. He replaces Mohammad Ali Dehqan-Dehnavi.
Tehran’s share market has been grappling with chronic recession over the past year with millions of retail investors in the red.
The downturn followed a historic rally in the beginning of previous fiscal year when the fresh liquidity tsunami flowed into the market causing price bubbles that eventually burst.
The benchmark of Tehran Stock Exchange, TEDPIX, climbed fourfold in less than five months only to crash soon after wiping off more than half of the value of shares.
The bearish trend continues and has undermined the capacity of the capital market to play its destined role in the economy.
As per available data, total funds made available by the capital market was 2,720 trillion rials ($10 billion) in five months of the current fiscal year (March 21- August 22). That was down 48% compared to the corresponding period in the last fiscal year, the SEO has reported.
Decline in capital market clout to help meet critical funding needs of manufactures is largely due to the unprecedented recession in the stock market plagued with ever-increasing capital outflows and persistent sell-off since the collapse in August 2020.
