Keeping with the tradition of working in investor interest and improving market functions, the Securities and Exchange Board of India (SEBI) is likely to bring regulations to improve the functioning of OTC (Over The Counter) trades and clearing corporations soon.
Speaking at the IIFT National Finance Symposium 2009 on Tuesday, JN Gupta, executive director, SEBI, said, “While SEBI focus has largely been on regulating exchange traded market, it is likely to make changes in OTC markets going forward.” He also said that regulation would soon be coming for clearing corporations.
Clearing corporations are organisations that work with the exchanges to handle confirmation, delivery and settlement of transactions.
On role of good regulations in developing markets, he cited an example of circuit breakers. “While many argued that circuit breakers should be repealed, the system has helped rationality return to markets the next day. It gives people time to digest news that was unexpected. The next day, rationality returned to markets.”
He was hinting at the circuit breaker that got triggered after markets jumped 20 per cent on April 17 following unexpected poll results.
Speaking on sidelights of the conference, Madhabi Puri Buch, MD and CEO of ICICI Securities Ltd, said SEBI proposal to extend trading hours would bridge the gap India presently has with international markets.
While world of equity investors trade 24X7, India has many trading holidays in addition to time gap with international markets.
Approving the market regulator plan to extend trading hours, Buch said, “With this, Indian investors would not remain unaware of happenings in world markets which have impacts on Indian markets.”
We would be able to arbitrage the movements of world markets,” Buch added.
Rakesh Jhunjhunwala, Partner, Rare Enterprises and a celebrated broker said, “India has just started the multi-decade bull run and is poised for an unprecedented bull market.”