India's markets regulator will review the compliance requirements imposed on foreign portfolio investors (FPIs) and issue a consultation paper seeking views on aligning Indian norms with global standards, SEBI Chairman Tuhin Kanta Pandey said in Mumbai on Wednesday, PTI reported.
Source: PTI via The Hindu BusinessLine
"We recognise that some compliance requirements in India remain more onerous than those in other major jurisdictions. We are reviewing these requirements and will issue a consultation paper to seek views on aligning them with global standards, while preserving the safeguards needed for investor protection and market integrity," Pandey said while addressing the annual Business Standard BFSI Insights Summit.
Source: PTI via The Hindu BusinessLine
Pandey said SEBI regularly meets FPI officials visiting India and notes the specific areas they find troublesome, and that the review covers those and other compliance requirements, Informist Media reported from the same summit. He said it was not right for the regulator to comment on any investor's choice to enter or exit, adding that SEBI's job is to ensure markets are liquid and that investors can invest and exit with confidence.
Source: Informist Media
Steps already taken, and the scale of the market
According to PTI, SEBI has already streamlined market access for foreign investors, eased digital onboarding and simplified procedures, and has harmonised several compliance requirements with those in major global jurisdictions. Pandey said India's market capitalisation-to-GDP ratio has risen from 69 per cent in FY16 to around 130 per cent currently, and outstanding corporate bonds have reached nearly Rs 61 lakh crore — yaani about Rs 61 trillion — equivalent to about 55 per cent of bank credit to industry and services.
AI supervision and closing auction
At the same summit, Pandey said SEBI is implementing the International Organization of Securities Commissions' supervisory toolkit for artificial intelligence and is exploring a securities-market-specific AI model that could be built and governed domestically as a form of digital public infrastructure, The Hindu BusinessLine reported. He said AI-enabled tools could improve services, risk assessment and supervision, but require reliable data, effective oversight of models and clear accountability for decisions.
Source: The Hindu BusinessLine
On the closing auction session, Pandey said it is here to stay in the cash market, and that the regulator has only delinked the equity derivatives settlement expiry price from the closing auction price, Informist Media reported. On self-listing by stock exchanges, he said the proposal is neither on the table nor off it, and is not being actively considered.
The consultation paper, when issued, will set out the specific FPI compliance requirements SEBI proposes to change and invite comments from market participants before any rule is amended.