India secures top rating in all financial market norms

India's financial market regulatory framework today got the top-most ratings from the global bodies of banking and capital market regulators, with RBI and Sebi being rated better than their peers in China and the US.

In the latest global 'assessment study' of the regulatory framework for financial market infrastructures across the world, only six countries - India, Australia, Brazil, Hong Kong, Japan and Singapore - have got the highest score of '4' for all eight parameters on a scale of one to four.

As per the latest assessment of 28 jurisdictions, the US has scored the top-most rating of 4 on five out of total eight parameters, while China has got three top-most scores.

European Union scored the top rating on six parameters, while ratings for two were 'Not Available'.

The 'Rating Level 4' means that the financial market regulators - Reserve Bank of India (RBI) and the Securities and Exchange Board of India (Sebi) - have all regulatory measures "fully in force".

The Committee on Payments and Market Infrastructures (CPMI) and the International Organisation of Securities Commissions (IOSCO) today published the second update to the Level 1 assessments of implementation monitoring of the Principles for financial market infrastructures (PFMIs).

The annual assessment studies the implementation status of the international Principles for Financial Market Infrastructure (PFMIs) in various countries.

These PFMIs work as global standards for the financial sector entities and have been finalised by the International Organisation of Securities Commissions (IOSCO) and the Bank for International Settlements (BIS).

IOSCO is a global grouping of capital markets regulators, including Sebi, while BIS acts as the central bank for all central banks.

The study showed that Sebi and RBI have put in place all necessary regulations for the PFMIs, while they also "have a legal capacity to implement the responsibilities" outlined under these global standards.

The assessment took into account regulations for central counter-parties, trade repositories, payment systems, central securities depositories and securities settlement systems.

India has scored top ratings on all these counts.

Level 1 assessments, published ytoday, are based on self-assessments by individual jurisdictions on how they have adopted, within their regulatory and oversight frameworks, the PFMIs' 24 principles for FMIs and four of the five responsibilities for authorities.

The initial Level 1 assessments were conducted in mid-2013 and a report was published in August 2013. The current report is the second update to the Level 1 assessments and shows that good progress has been made by the 28 participating jurisdictions since the previous update in May 2014. In particular, the gap in the progress on implementation measures applicable to central securities depositories and securities settlement systems vis-a-vis other types of FMI has now closed, according to the release.

The next update of the Level 1 assessments will be conducted in 2016.