The Securities and Exchange Board of India (SEBI) wants intermediaries and infrastructure service providers in the capital market to lower the cost of transaction to spur growth of the market.
“One of the challenges that Indian capital market is facing is the cost of transaction and we are not there,” said CB Bhave, chairman, SEBI, at the Federation of Indian Chambers of Commerce and Industry’s annual conference on capital markets.
“This cost has three elements — brokerages, taxes and impact cost. While in case of impact cost, Indian market is the most efficient in the world, in brokerage part we need to see what needs to be done. If we want to grow the market, the costs have to come down, which calls for becoming more efficient,” Bhave said, adding that while the number of transactions in India compares very well with the developed world, the ticket size is very small.
Bhave said SEBI has been taking steps to lower the transaction cost. “In the past two years, SEBI has slashed fees for various intermediaries because ultimately this cost is passed on to the customers,” he said.
He advised corporates to embrace International Financial Reporting Standards (IFRS). “One of the challenges the corporate world is facing is to learn the global language of accounting (IFRS). This language needs to be same across the world as Indian companies are listing on outside exchanges and foreign companies will list here.”