2017年-世界发展银行全球_India_Financial_Sector_Assessment_Program_Update___Securities_Regulation_51页_1mb

Summary of India's Securities Regulation and Financial Sector Assessment Program (FSAP) Update - October 2017

Core Content

This Technical Note provides an overview of India's securities market and regulatory framework, focusing on the implementation of IOSCO principles and the recommendations arising from the Financial Sector Assessment Program (FSAP) update. It highlights the progress made by SEBI in regulatory reforms and outlines areas for further improvement.

Main Points

1. Economic and Market Growth

• India's capital markets have grown significantly over the past decade, with the market capitalization of securities markets now being the 9th largest in the world, accounting for 69.80% of India's GDP.
• The IPO market in 2016–2017 was strong, with 25 companies raising INR28,220 crore (approximately USD 4.2 billion), which was the third highest total in the past twelve years and nearly double the amount raised in the previous five years combined.
• The corporate bond market has also grown, and India had the third largest corporate bond market in 2011 among 36 emerging market countries.

2. Regulatory Structure

• SEBI is the principal regulator of India's capital markets, responsible for protecting investors, regulating the market, and promoting its development.
• SEBI oversees the public offering of equity, debt, and asset-backed securities, as well as collective investment schemes (CIS) and trading in recognized stock exchanges (RSEs).
• RSEs (Recognized Stock Exchanges), including BSE and NSE, play a key role in market regulation, performing functions such as market surveillance, listing, and compliance monitoring.
• The Forward Markets Commission (FMC) merged with SEBI in 2015, and SEBI now assumes responsibility for regulating commodity derivatives markets, while commodity spot markets remain under the jurisdiction of the Central and State Governments.

3. SEBI's Regulatory Reforms and Enhancements

• SEBI has made significant changes to its regulatory programs, addressing findings from the 2013 FSAP assessment.
• Amendments to the SEBI Act have increased SEBI's investigative powers, created a special court for criminal cases, and clarified its authority over pooled investment schemes exceeding INR 100 crore.
• SEBI has expanded its on-site inspection program and developed a risk-based matrix for regulatory oversight.
• SEBI has introduced comprehensive mutual fund regulations, including monthly portfolio disclosure, concentration limits, and stress tests for liquid schemes and money market funds.
• It has also adopted registration, licensing, and operational regulations for investment advisors, portfolio managers, alternative investment funds (AIFs), and securities analysts.

4. Market Oversight and Surveillance

• SEBI and RSEs have improved their market surveillance capabilities, but there is no real-time surveillance system across all markets.
• The Integrated Market Surveillance System (IMSS) has been developed to enhance the monitoring of market activities.
• SEBI is encouraged to develop real-time comprehensive market surveillance capability on an "as needed" basis during periods of market stress or volatility.

5. Key Recommendations

Key Information

• Equity Markets:

  • The BSE and NSE dominate secondary trading, with the NSE handling the majority of trading volume.
  • The BSE Sensex and NSE Nifty indices showed strong growth in FY2017, with gains of 17% and 20%, respectively.
  • The P/E ratios for these indices were 20.54 and 23.78 as of March 16, 2017.
  • A significant portion of the market capitalization growth was due to valuation expansion rather than increased profitability.

• Capital Market Instruments:

  • IPOs: The proportion of fresh issues in IPOs has decreased over time, with offer for sale (OFS) becoming more common.
  • Corporate Bonds: The issuance of corporate bonds has increased significantly, reflecting the growth of the corporate bond market.

• Market Participants:

  • The mutual fund industry has grown, with 45 registered asset management companies managing INR17.89 trillion in assets under management (AUM) as of March 2017.
  • SEBI has established a system for mutual fund distributors to obtain an ARN number from AMFI and certification from NISM.

• Commodities Markets:

  • SEBI regulates commodity derivatives markets, while spot markets are regulated by Central and State Governments.
  • The SME platform provides a secondary market for small and medium enterprises, with a minimum paid-up capital of INR25 crore.
  • The availability of share prices on the SME platform has facilitated secured borrowing from banks.

Conclusion

The document highlights the progress made by SEBI in regulating and developing India's capital markets, as well as the need for continued improvements in market surveillance, regulatory coordination, and the implementation of IOSCO principles. It emphasizes the importance of strengthening the regulatory framework to ensure market stability, investor protection, and efficient market operations.