Scrap registration of foreign equity funds: SBA

The Swiss Bankers' Association (SBA) wants India to do away with the norm that requires equity funds to register as foreign institutional investors (FIIs).

"India should abandon the practice of making foreign equity funds register as FIIs," Pierre Mirabaud, chairman, SBA, said today.

Mirabaud said the process of registering is cumbersome. "India should become an open market. Investors should be allowed to enter and exit without having to register as FIIs," he said.

As per the existing norms, foreign funds that want to invest in Indian equities are required to register with the Securities and Exchange Board of India (Sebi) as FIIs.

Mirabaud said Asian nations like Thailand, Malaysia and Indonesia are open and institutional investors need not go through formalities of any registration.

He said India accounts for almost 20 per cent of Swiss banks' exposure to the Asian region. Switzerland manages about one-third of the world's savings invested offshore.

Banks there have considerable importance as their contribution to the country's GDP is about 11 per cent. The essential ingredient of the success of Swiss banks is confidentiality and the respect for personal privacy, he said.

In addition to Switzerland's political, economic and monetary stability, portfolio management banks too draw clients to the Swiss financial centre.

He said the SBA aims to promote high standards so that the confidence clients have in Swiss banks continues to be justified.

He said the respect for confidentiality is strictly defined in Switzerland. The laws of secrecy in banking does not protect criminals and terrorists.

Switzerland works closely with foreign authorities when judicial assistance is required in criminal cases, as long as the request from the foreign authority is related to what is also a criminal offence under Swiss law.