How to protect India’s shareholder capitalism from itself

Over the past five years India’s financial markets have undergone an extraordinary transformation. Rapid economic growth has been accompanied by a booming stockmarket, which has risen by around 80% in dollar terms. Tens of millions of Indians have become investors for the first time. The world’s most populous country is becoming a nation of shareholders. This revolution is welcome, but financial regulators are worried about sky-high retail use of speculative equity derivatives as markets have taken off. They are right.