At a time when investors worldwide are concerned over domestic growth, the outcome of the US-China trade war and its impact on fund flows into emerging economies, Sebi chairman Ajay Tyagi along with other officials of the markets regulator held meetings with a number of industry and investor associations last week in New York, Boston and Washington, DC.
While the regulatory team from India apprised them on recent developments in the country’s economy, Indian capital markets and initiatives taken by the regulator, Tyagi said that they also received ideas on further improving the ease of doing business in India.
“We met various stakeholders during the meetings. The participants welcomed various initiatives taken by Sebi. We found the interactive sessions quite useful in terms of new ideas for further improving the ease of doing business,” said Tyagi.
In a statement issued Monday, the Securities and Exchange Board of India (Sebi) said that while discussions took place on recent policy measures taken by Sebi relating to various areas such as FPIs, primary market, secondary market, mutual funds and corporate bond market among others, “the participants were keen on emerging areas such as REITs and InvITs ... Several participants also showed interest in the Alternative Investment Fund space with its relaxed foreign investment norms wherein the investments had multiplied by more than 15 times in the last 5 years.”
Between July and August, foreign portfolio investors (FPIs) have sold Indian equities worth a net of Rs 30,010 crore as concerns grew over July 5 Budget announcement about levying higher surcharge on individuals with taxable income of over Rs 2 crore as well as on FPIs. Following the government’s reversal of the decision with respect to tax impact on FPIs on August 23, September witnessed positive inflows into Indian equities.
In its release, Sebi said that the team also discussed upcoming regulatory measures related to frameworks for issuing depository receipts, direct listing of Indian equities abroad, and regulatory sandbox, among others.
Considering that about a third of the total assets of around $450 billion under the custody of FPIs in India are from US-based FPIs, the Sebi chief emphasised the importance of US investments into India especially taking into account the growing partnership between the two countries.
The regulator also said the increasing number of registrations of FPIs every year signifies the sustained interest of the foreign investors in Indian capital markets.
The achievements of both Indian primary markets and secondary markets were brought out in the meetings. This included more than $120 billion raised through equity and debt in each of the past two years, market capitalisation of Indian listed firms being in the top 10 global markets, and Indian stock exchanges ranked in top 10 in the number of contracts in equity derivatives.