Common KYC norms for FIIs soon, says Chidambaram

FM also assures serious action in matters related to insider trading.

In an effort to make India a more investor friendly destination, the government plans to standardise know your customer (KYC) norms across all financial regulators for foreign institutional investors.

?The government is working on converging all KYC norms and they (FIIs) will have common KYCs… The government will soon come out with a new set of norms that will have a common KYC across various regulators, be it pension, banking, stocks or insurance. There should be one KYC,? finance minister P Chidambaram informed the Rajya Sabha on Monday.

At present, if a new FII applies in India, it has to go through due diligence and once registered it has to go through KYC norms, he said.

The Union Budget 2013-14 has already proposed common KYC norms for all FIIs across the Sebi platform. Economic affairs secretary Arvind Mayaram had told The Indian Express that common KYC norms across all financial sector regulators would be second phase of this plan.

Meanwhile, replying to members? queries when the Sebi (Amendment) Bill, 2013, was taken up for consideration and passage in the House, Chidambaram said the cumulative investment graph of FIIs in India is rising and further investments would help boost the equity markets.

?I am confident that with more investment coming in from FIIs, the Sensex and Nifty will continue to be on an upward trajectory and give good results,? Chidambaram said.

The finance minister also assured the House of serious action in matters of insider trading and said Sebi has been asked to step up systems and surveillance to deal with such matters. Between April 1, 2009 and February 28, 2013, Sebi has suspended trading in 1,125 companies as on February 25.

?We take a serious view of insider trading. Insider trading is a serious offence. They are clever people. We have to be cleverer than the perpetrators of the fraud. We are trying to become cleverer. I have told Sebi to improve the surveillance. As we move forward, we will improve our systems and surveillance,? Chidambaram said.

Sebi (Amendment) Bill gets RS nod

The Rajya Sabha on Monday passed the Sebi (Amendment) Bill, 2013, with a voice vote. The Bill seeks to relax the selection criteria for the presiding officer of the Securities Appellate Tribunal (SAT) by appointment of a retired High Court judge having held the position for seven years.

At present, only a serving or retired Supreme Court judge or Chief Justice of a High Court can head the Tribunal making it difficult for the government to fill the post which has been vacant since November 2011. It will replace the existing ordinance promulgated on January 21 this year. ENS

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First published on: 12-03-2013 at 08:42 IST