Innovation in Financial Instruments: Analysis using Investment Risk and
Regulatory perspectives
Vishwas Mysore$
Abstract
Purpose/ Objective:
This paper intends to analyze the various investment options that have been available in India
over the years. Innovation in the design of investment instruments is studied with a risk
perspective. Also, the suitability of such instruments to a relatively conservative market such as
India has been looked into. Changes in the regulatory environment are suggested in order that the
culture of savings gradually and smoothly gives rise to a culture of investment which is so very
important for rapid business growth and economic development.
Approach:
Initially, a historical overview of the Indian investment market is presented. Subsequently, recent innovations in investment instruments are discussed. All along, the Return-Risk perspective is retained in order to evaluate the investment options.
Major Findings:
Innovation in investment options in India has in general, lagged behind the Global Investment market. There is a lot of scope for safe yet innovative instruments to be offered and consumed in India.
Also, there is need for greater financial literacy in order to promote and encourage a culture of investment rather than speculation amongst the Indian populace.
Research Limitations:
This paper does not discuss portfolio management techniques and investment strategies that generate above-market returns or that seek portable alpha.
The paper restricts its focus to the innovations in investment options that are available to both the individual as well as institutional investors.
Value:
Understanding of the Investment market culture in India and a comp ...