Global market regulators move towards commonality

Mumbai, March 23 | Updated: Mar 24 2005, 06:23am hrs
With Indian capital markets progressively making a larger global footprint, there are several intricacies on corporate governance and harmonising standards and regulations which need re-examination to build up investor confidence. This was the essence of the discourse in the afternoon session at the International Seminar on Emerging Capital Markets on Wednesday.

Speaking on the regulatory regime in border-less securities market, Herbert Kronke, secretary general- UNIDROIT Rome stated that alliances among stock exchanges are becoming the order of the day as market operators go transnational. Companies across the globe are feeling the need to list simultaneously on local and global exchanges. He, however, noted that a combined regulatory environment has not been enhanced to this extent as an issuer has to face many legal obstacles. Mr Kronke said: regulators are moving in a direction of commonality. A proof of this is the creation of International Organisation of Securities Commission (IOSCO), of which the Indian market regulator is an active participant.

Throwing light on corporate governance, Hideki Kanda, professor of law, University of Tokyo, noted that there is an immediate need for effective regulatory norms and their enforcement. About the legal systems to end insider trading, he said: it is not enough to say that do not do anything wrong. In a fast-developing market like India, there has to be changes in regulatory techniques, and better surveillance systems must be put in place to penalise defaulters.

Another propeller for investor confidence will come through self-regulation, said Roberta Karmel, former commissioner of Securities and Exchange Commission, Washington.