Sensing high volatility in the market, Securities and Exchange Board of India has placed its monitoring system on "high alert" to investigate any unusual movements and take prompt corrective action to protect investors interest.
"We are watching every movement, when market goes up or there is a fall, and take action when we understand it is time to intervene," Bajpai said addressing an investor protection workshop organised by the Institute of Chartered Accountants of India in Mumbai on Friday.
Investors participating in the stocks market should assess risk-reward link and make informed decisions, he said adding chartered accountants should help in providing a true picture of the financial health of the companies.
The Sebi chief said the market regulator and ICAI would form a taskforce to review all the capital market regulations and fine-tune them for the benefit of investors.
The market regulator along with professional bodies would conduct 1,500 investors' seminars in over 400 cities in 2004, Bajpai said.
Dwelling on the risks involved in the Indian capital market, the Sebi chief said operational risks were far low in India than those in developed markets including the US.
On the future prospects of regional stock exchanges, he said with rapid changes in technology, the original business model has become obsolete and redundant.
"We had suggested they either merge with the Bombay Stock Exchange and National Stock Exchange or form a third viable platform, but they are yet to submit any concrete proposal," he added.
