The Securities and Exchange Board of India (Sebi) is thinking big. In a major move, Sebi has drawn up a strategic action plan (SAP) for 2003-04 which aims at making India the benchmark in terms of capital market development for the rest of the world. The SAP aims to do this over the next 12 to 15 months, across a slew of areas concerning the markets.Confirming this, Sebi chairman G.N. Bajpai said, ‘‘The underpinning of the SAP will be that India should be the global capital market benchmark by the next 15 months.’’ Sebi will look through all the reforms that have taken place across seven market jurisdictions, and aim at bettering those reforms in each segment of the market. The seven markets that Sebi has chosen for this benchmarking process are the United States, the UK, Hong Kong, Canada, Singapore, Malaysia and Korea. ‘‘We will find out all the reforms and developments that have taken place in each of these markets and go beyond them,’’ Bajpai explained.Among the key areas where Sebi wants to take reforms to the highest stage globally are in settlement systems, where the Indian markets already have a cutting edge with electronic trading and T+2 settlement. This apart, corporate governance is another area where Sebi is focusing on. Disclosure norms, quality of intermediaries, accounting standards and mutual fund regulations are the other areas where a team of Sebi officials is working on. Sources said the achievements of the past year, where Sebi has been able to implement the T+2 settlement cycle from the earlier T+3 and put in place better risk management measures, have given Sebi the confidence to embark on such an exercise. Today, the Indian capital market is a multi-product one, has efficient risk management systems and sees millions of trades every day, much higher than other markets.Markets like Korea, Hong Kong and Singapore are essentially ‘single’ markets, while the Indian market is spread across about 400 cities and around 10,000 trading terminals countrywide. There is also a central counterparty system by way of a clearing corporation and trade guarantee fund, apart from real-time monitoring of positions and margins. Trading terminals are also de-activated the moment brokers cross their exposure limits, which is not the case even in some developed markets. ‘‘All this reflects the robustness of India’s risk management procedures. We are now aiming at being the best in the world,’’ Bajpai added.
