As foreign portfolio investor (FPI) participation remains a key concern for the Indian stock market, Securities and Exchange Board of India (SEBI) Chairman Tuhin Kanta Pandey recently said the market regulator would examine whether market participants in India face higher compliance costs than their counterparts in other emerging and developed economies.
SEBI is also working with the Reserve Bank of India (RBI) to make the process of bringing foreign investors into Indian markets faster and smoother, said Pandey.
FPIs crucial for Indian stock markets
While speaking at an event by NDTV Profit, Tuhin Kant Pandey addressed a key concern for India’s stock market, which is the trend of foreign investors considering to weigh their options across countries even as Indian markets grow in size and sophistication. “Because in terms of markets, we are fairly world class. But in order of compliance, if we are on the higher side, we should certainly lower that burden and make it better,” NDTV quoted Pandey.
SEBI to issue consultation paper soon
SEBI will review compliance requirements for FPIs and issue a consultation paper to seek views on aligning Indian norms with global standards, while retaining safeguards for investor protection and market integrity. Pandey mentioned that SEBI is examining the existing norms to facilitate greater foreign investor participation in domestic markets.
“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 an annual summit on Wednesday.
The move comes as India seeks to deepen its capital markets and widen the pool of domestic and international capital to meet the country’s growing financing requirements.
SEBI measures to boost foreign investor participation
Apart from plans to launch a consultation paper, SEBI has already undertaken several measures to facilitate foreign investor participation, including streamlining market access, easing digital onboarding and simplifying procedures.
Apart from discussion measures to increase foreign investors participation, Pandey also made an important announcement related to mutual fund investment. SEBI chief announced that direct mutual fund plans would become the default option on asset management companies’ digital platforms from November 1.
