India’s financial market regulations get top ratings

The regulatory framework of Indian market regulators was rated better than those adopted by similar bodies in the US and China.

The Dollar Business Bureau

Measures taken by the Reserve Bank of India (RBI) and Securities and Exchange Board of India (SEBI) to regulate the financial markets have got top ratings in a global survey. The regulatory framework of Indian market regulators was rated better than those adopted by similar bodies in the US and China, according to a latest assessment study conducted by the International Organisation of Securities Commissions (IOSCO) and the Bank for International Settlements (BIS). The study was conducted to assess the implementation of Principles of Financial Market Infrastructures (PFMIs) defined by IOSCO— a global body of regulators and BIS— a grouping of central banks. The study assessed regulatory framework of different countries on eight parameters and gave ratings in the range of 1-4 with the highest rating ‘4’ indicating that “final implementation measures are in force”. The parameters of assessments included regulations for central counter parties, payment systems, securities settlement systems, trade repositories and central securities depositories. Of the total 28 countries included in the survey, India along with five other countries got top rating in all eight parameters. The other five countries in this category were Australia, Brazil, Hong Kong, Japan and Singapore. About Indian regulators, the report said, “The FMIs under the oversight of each authority is different and there is no overlap between the two authorities for a specific FMI.” The US scored highest rating on five parameters, while China got the top-most rating on only three parameters. The ratings was based on the first phase of monitoring which assessed whether countries have completed the process of adopting legislations and policies meant for the implementation of the global principles of financial market infrastructure. The Level 2 of the study will assess whether the content of legislation, regulations and policies is complete and consistent with the principles and the responsibilities and Level 3 will assess whether there is consistency in the outcomes of implementation of these principles and responsibilities. “The current report is the second update to the Level 1 assessments and shows that good progress has been made by the 28 participating jurisdictions since the previous update in May 2014. In particular, the gap in the progress on implementation measures applicable to central securities depositories and securities settlement systems vis-a-vis other types of FMI has now closed,” said a press statement issued by BIS and IOSCO.    

June 12, 2015 | 4:01 pm IST.


The Dollar Business Bureau - Jun 12, 2015 12:00 IST