The Securities and Exchange Board of India (SEBI) is moving forward with strategic initiatives designed to make the country's capital markets more accessible, resilient, and aligned with international standards. Speaking in Mumbai on October 28, SEBI Chairman Tuhin Kanta Pandey outlined key regulatory directions at the annual Business Standard BFSI Insights Summit.
The plans encompass a comprehensive review of foreign portfolio investor guidelines, perspectives on stock exchange self-listing, and broader measures to support the next phase of national financial market development.
Reviewing Foreign Portfolio Investor Rules
SEBI plans to examine compliance requirements for foreign portfolio investors (FPIs) to bring domestic regulations closer to international benchmarks. Pandey acknowledged that certain compliance rules in India remain more demanding than those found in other major financial markets.
To address this gap, the regulator intends to issue a consultation paper seeking public and stakeholder views. The objective is to simplify these requirements while preserving critical safeguards for investor protection and market integrity, thereby encouraging greater foreign investment to finance growing businesses.
Previous reform efforts by SEBI have already focused on easing international participation through:
- Simplifying market entry procedures
- Improving digital onboarding processes
- Reducing administrative burdens
- Aligning several compliance provisions with practices in major international financial centres
Perspectives on Self-Listing and Regional Exchanges
During the summit, Pandey also addressed questions regarding structural developments within India's market infrastructure institutions.
Stock Exchange Self-Listing
Regarding the possibility of allowing stock exchanges to list their shares on their own trading platforms, Pandey noted that the proposal is not currently under active consideration. While self-listing is permitted in various international markets, India's framework involves multiple operating exchanges and potential conflicts of interest because exchanges also perform regulatory functions.
Revival of Regional Exchanges
On the topic of reviving regional exchanges like the Calcutta Stock Exchange, Pandey emphasized that commercial viability, sufficient trading volumes, and continuous technological investment remain absolute essentials, even though existing regulations do not explicitly prohibit new exchanges.
Market Growth and Future Focus
India’s financial landscape has experienced substantial expansion, highlighted by key economic milestones:
- The market capitalisation-to-GDP ratio has climbed to approximately 130%.
- Outstanding corporate bonds have reached nearly ₹61 lakh crore, representing about 55% of bank credit extended to industry and services.
Pandey underscored that the upcoming phase of market development must leverage both domestic savings and international investment. The success of SEBI's proposed compliance reforms will ultimately depend on balancing easier market access with robust regulatory supervision to maintain stability and investor confidence.
