New chairman of the Securities Exchange Board of India (Sebi) CB Bhave seems to have outlined a plan of action to impact the stock market reforms under his tenure. Speaking to an audience of institutional investors, assembled at the India-Asia Investment Forum organised by Institutional Investor in Singapore, Bhave mentioned that stock lending and borrowing mechanism and introduction of exchange-traded currency futures and exchange-traded interest rate futures would get priority and that the implementation of REIT would come later.
?The parameters would be announced soon and a firm date will set for the exchanges to follow the implementation. We are also working closely with the central bank to introduce the exchange-traded currency futures and currency-traded interest futures,? Bhave added. The priority of the regulator would be to create an infrastructure to create capacity with an eye on sound risk mitigation systems.
Sebi is also committed to implement reforms in the primary market and speeding up the listing process is also a priority with the regulator. Bhave also ruled out the possibility of implementing a circuit breaker system on the day of listing, in the near future. ?At the moment, there is no need to change the system?.
However, sufficient headway was not made in the areas of getting corporate debt transactions onto the exchanges. Bhave said, ?Trades take place over the counter and not on the exchange. So it?s not that there is no debt market. The puzzle for us is to figure out how to get these trades on the exchange.?
Bhave, while acknowledging the role the foreign institutional investors, said they have played to make the Indian markets robust. He also pointed out that the current turmoil in the global financial markets were a cause for concern and that Indian infrastructure and risk mitigating systems would measure up to global standards. When quizzed about the status of FII registrations after the implementation of the P-Note regulations, he mentioned that around 190 new FIIs registered after October and 470 sub-accounts. It takes around 15 days to three weeks for the institutions to get registered, he added.
Bhave asserted the need for Indian markets to mature and not get perturbed when FIIs withdraw money from the market, ?We Understand that flow of investment will not always be like one way traffic. Our systems and markets can be said to be matured when we can handle both inflows and outflows from the market?.