Skip to Content

India gets top rating for prudent financial market norms

by June 28, 2016 General

LONDON: India today got top-most ratings, along with nine other countries, for a robust financial market regulatory framework in compliance with the global benchmarks.

Overall, the regulatory regime put in place by the Reserve Bank of India (RBI) and the Securities and Exchange Board of India (Sebi) have got better ratings than their counterparts in various countries including the US.

As per the latest update to the ‘global assessment study’ of the regulatory framework for financial market infrastructure, a total of 10 jurisdictions including India have managed to secure the maximum score of ‘4’ on a scale of one to four on all eight parameters.

These jurisdictions include Australia, Brazil, Canada, China, Hong Kong, Japan, Russia, Singapore and Switzerland.

‘Rating Level 4’ indicates that RBI and Sebi have all regulatory measures “fully in force”.

This is based on assessment studies about implementation status of the international Principles for Financial Market Infrastructure (PFMIs) in various countries.

The Bank for International Settlements (BIS) and the International Organisation of Securities Commissions (IOSCO) came out with the PFMIs in 2012.

The IOSCO and BIS today released the third update of its Level 1 assessment of various jurisdictions.

The US, the UK, Mexico and Turkey are among the jurisdictions that are yet to achieve full rating across all the eight parameters.

Regulations for central counter-parties, trade repositories, payment systems, central securities depositories and securities settlement systems were taken as parameters for the assessment.

“Overall, the third update to the Level 1 assessments shows that participating jurisdictions have continued to make progress since the previous update in completing the process of adopting legislation, regulations and/or policies that will enable them to implement the PFMI,” the assessment report said.

IOSCO is a global grouping of capital markets regulators in different countries, including Sebi, while BIS is known as the central bank for all central banks across the world.

In Level-1, it is being assessed whether jurisdictions have completed the process of adopting the legislation, regulations and other policies that will enable them to implement the principles and responsibilities. The latest report looks into the status of each jurisdiction’s legal, regulatory or policy frameworks as on January 8 this year.