At the inauguration of the new Sebi Bhavan last Friday, Finance Minister P. Chidambaram said that the periodic scams and sharp volatility in the capital market scares a lot of ordinary people and makes them distrustful about investment. He wanted the regulator to find ways to allay the fears -- genuine and irrational of this large middle ground of savers and turn them into investors.

How would the regulator go about doing this? Here are four ways in which it could quickly improve investor confidence in the market.

IPO ratings. The large middle-ground of people who distrust the capital market include thousands of investors who burnt their fingers by investing in scores of fly-by-night companies that vanished with their money in the 1993-95 period. Another wave of IPOs, including scores of realty companies, is getting ready to raise public money once again. The difference is that the issues are bigger and premium expectations are higher.

In the 1990s, some newspapers did try to provide the public with an objective analysis of IPOs, but were criticised for their trouble, because investors were too keen to invest and unwilling to heed warnings. The regulator needs to push for independent rating of IPOs. Sebi has made a small beginning by seeking voluntary rating of a few IPOs. The effort holds promise and must be quickly made mandatory and funded out of Sebi\'s own Investor Protection Fund, which has been strongly endorsed by the Prime Minister.

Grievance redressal. One way of allaying investors\' fears is by putting in place efficient grievance redressal mechanisms. Sebi already provides on-line grievance redressal (www.investor.sebi.gov.in) system, complete with a tracking number. This is welcome, but there is room for speed as well as networking with other grievance redressal efforts. Another is a free Investor Helpline, set up by the Midas Touch Investors Association and funded by the Investor Education and Protection Fund (www.investorhelpline.in ). This e-helpline, which was launched on September 8, 2006 has already shown a decent record of grievance redressal, given that it has hardly been publicised. The site has 11 different forms for lodging specific grievances which include non-receipt of dividend, intimation about shares sent for transfer, demat, remat, bonus shares, refund money and fixed deposit related issues. This is probably because it has a proper system for processing complaints as well as forwarding, retrieval and systematic follow-up and reminders.

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