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Unregistered foreign investors can't be totally regulated: US expert

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Unregistered foreign entities whose investments are believed to be significantly responsible for the dizzying heights the Indian stock market has zoomed to can't be totally regulated and the bourses have to live with them, a US expert says.

"What we can say from looking at the experience of other emerging economies it is troubling to see the entry of foreign funds and even foreign acquirers to come into your domestic market and make a quick profit and leave again," says Robert F. Bruner, an academic at the University of Virginia and co-author of a best-selling book on the lessons to be learnt from the stock market crash of 1907.

The activities of such entities that ride piggyback on registered foreign institutional investors (FIIs) can only be partially controlled since "markets will invent ways around regulations", Bruner told IANS in an interview.

Bruner is the dean and Charles C. Abbot professor of business administration at the Darden Graduate School of Business Administration at the University of Virginia.

With Sean D. Carr, who also teaches at Darden, Bruner has co-authored "The Panic of 1907: Lessons Learned from the Market's Perfect Storm" that appeared in September and became an instant bestseller. He has authored a total of 17 books.

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