Small investors are best advised to enter the stock market through institutions such as mutual funds and pension funds, Sebi Chairman U K Sinha said on Wedneday while asserting that he was not worried if smaller investors do not participate in IPOs directly.

Sinha also emphasised that the regulator has put in place all necessary measures to check any manipulations in the primary markets, even as various attempts have been made in the past to manipulate the IPOs.

"I don’t mind if retail investors don’t participate in the IPOs because I would rather like them to participate through institutional investors," Sinha said at an event here.

"All over the world, including in India, retail participation historically has been primarily for getting in early. If retail is not participating, we shouldn’t worry about it as long as people come into the market (through other routes) and long-term interests are protected," he added.

The Sebi chairman was speaking at ‘Towards a fin-powered India’ conclave organised by investment planning platform5nance.com.

"For large number of small investors and uninformed investors, Sebi’s position is that they should not enter the market directly.

"They should not enter the primary or the secondary market on their own and they should only enter, in my understanding, through an informed investor or through an agency which is knowledgeable about the markets such as mutual funds and pension funds," Sinha said.

Talking about various other initiatives, Sinha said ‘trust, ease and convenience as well as investor education’ can help bring in more people into the securities market.

He also said Sebi has an integrated surveillance department which is regarded as one of the best in the world.

"We generate about 100 alerts every day and each and every alert is followed. On an average, out of these 100 alerts about 10 alerts are taken to the next stage (of probe) and many of the things have been initiated because of the surveillance mechanism," Sinha said.

With the help of this mechanism, Sinha said over 900 companies have been banned by Sebi for misusing stock markets for the purpose of tax avoidance and the action in these cases have been taken by the regulator on its own without being asked by the tax authorities.

Noting that Sebi has simplified know-your-client process for investors, Sinha said the regulator is in dialogue with RBI, IRDA and the government to bring in a single KYC system for the entire financial sector and is optimistic that the same would be implemented.

He also reiterated that Sebi is looking into the possibility of providing mutual fund schemes through modern platforms such as e-commerce.