ICI Comments on Evolution of Indian Regulations Governing Institutional InvestorsWashington, DC, March 12, 2004 - The Institute supports action taken by the Securities Exchange Board of India (SEBI) to bring India in line with international investing norms, and has encouraged SEBI to continue that trend by abolishing the licensing fee for foreign institutional investors (FIIs) and creating a secure electronic filing system. Background
In a recent comment letter, the Institute asks that SEBI reconsider a rule regarding public disclosures of bulk trades by Indian stock exchanges. The rule, which took effect February 17, 2004, requires the stock exchanges to release details of trades over 0.5 percent of the number of equity shares of a company listed on the exchange in a single trading day. ICI states that this requirement increases the risk of "front-running" and creates an opportunity for speculators and other professional traders to exploit the system in ways that are detrimental to FIIs. The Institute also noted that several recommendations it made in previous communications with SEBI were implemented, including: - streamlining the FII licensing process for initial licenses and for adding subaccounts;
- facilitating FIIs' access to initial public offerings; and
- allowing FIIs to invest in futures and options on equal terms with domestic institutional investors.
Also as suggested by the Institute, SEBI is considering allowing securities lending. Related Links
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