India scores above US, China for financial market regulation

Jun 01 2014, 12:24 IST
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India has scored top rankings when it comes to putting in place necessary regulations to ensure soundness of the financial market infrastructure. India has scored top rankings when it comes to putting in place necessary regulations to ensure soundness of the financial market infrastructure.
SummaryIndia has scored top rankings when it comes to putting in place necessary regulations to ensure soundness of the financial market infrastructure.

Overtaking global giants like the US and China, India has scored top rankings when it comes to putting in place necessary regulations to ensure soundness of the financial market infrastructure.

The assessment forms a part of a study by global groupings of capital market and banking regulators from across the world, which have analysed the necessary regulatory framework put in place in various markets to match the Principles for Financial Market Infrastructure (PFMIs).

These PFMIs work as global standards for the financial sector entities across the world and have been finalised by the International Organisation of Securities Commissions (IOSCO) and the Bank for International Settlements (BIS).

IOSCO is a global grouping of capital markets regulators in different countries, including the Securities and Exchange Board of India (Sebi), while BIS is known as the central bank for all central banks across the world.

As per the latest assessment of 27 jurisdictions, including India, conducted by IOSCO and BIS, a total of six countries, including India have got the top-most rating on a scale of one-to-four.

The Rating Level 4 implies full compliance in terms of completing the process of having necessary regulations for Financial Market Intermediaries (FMIs) to ensure soundness of the financial market, as per the study.

The other five fully-compliant jurisdictions are Australia, Brazil, Japan, Hong Kong SAR and Singapore.

The US, China, Russia, Switzerland, Turkey, Chile, Mexico, Argentina did not score rating of four in any of the four parameters.

European Union scored the top rating on three parameters.

The assessment took into account regulations for central counter-parties, trade repositories, payment systems, central securities depositories and securities settlement systems. India has scored top ratings on all these counts.

The latest findings are based on first-level assessment that looked at jurisdictions having completed the process of adopting the legislation, regulations and other policies that would enable them to implement the principles and responsibilities related to financial market infrastructures.

Going by the report, all 27 jurisdictions have made significant progress since the initial assessments last year.

"Full, timely and consistent implementation of the PFMIs will be fundamental to ensuring the safety and soundness of key financial market infrastructures and to supporting the resilience of the global financial system," the report said.

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