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Compliance obligations' review to enable ease of doing biz in capital mkts

The report is aimed at ensuring ease of trading by reviewing all compliance requirements to trade in stock markets

Press Trust of India  |  New Delhi 

ease of doing business
Representative image | The report said requirement of uploading peak funding details to exchanges and reporting of order limits in the capital market segment should be done away with

Review of compliance obligations required by market intermediaries and participants for trading in will help in enabling the in capital markets, according to a report released on Saturday.

Currently, trading in require market intermediaries and participants to fulfil a number of compliance requirements.

The review of compliances will reduce the cumbersome paper work for retail investors, encourage broader participation and democratise prosperity and make Indian attractive to global investors.

In addition, it will enable market intermediaries to focus on serving customers and growing their businesses and also help in unlocking the potential value for listed companies.

"Due to rapid innovation and development, there is a scope for review and reconsideration of several requirements that effectively do not add significant value to the markets or market participants," Association of National Exchanges Members of India (ANMI) President Vijay Bhushan said at the launch of executive summary of Compliance Review Report 2020.

This was launched by Minister of State for Finance Anurag Thakur.

The report is aimed at ensuring ease of trading by reviewing all compliance requirements to trade in on the basis of four criteria -- addressing outdated and duplicate compliances, clarity on conflict compliances and bringing rationale to compliance system.

It has been prepared after the finance ministry, through a communication to markets regulator Sebi, advised to submit a "comprehensive review of compliance requirements" via national exchanges and ANMI.

"The report marks the beginning of roll-out of a series of reforms and is in accordance with the vision of Prime Minister (Narendra Modi) to bring about greater ease of doing business, which is now being extended to the Review of compliance will encourage participation from domestic and global investors to trade on Indian capital market," Bhushan said.

"The reform agenda should include providing a level-playing field to Indian by way of optimising the cost of transactions in line with other global financial markets," he added.

With regard to outdated compliances, the report said requirement of uploading peak funding details to exchanges and reporting of order limits in the capital market segment should be done away with.

In respect of compliance duplication, the report said registration under Central Know Your Customer (CKYC) and KYC Registration Agency (KRA) should not be allowed to run simultaneously, and one of them should be discontinued.

It further said that instead of uploading same documents with multiple exchanges, a common filing with the clearing corporation that clears the trades of brokers across multiple exchanges should be allowed.

According to the report, certain conflicting compliances including linking of Aadhaar and mobile numbers of individual clients needs to addressed.

"It is not mandatory for an investor to link his Aadhaar with his mobile number. In such cases, the investor cannot avail e-KYC and it becomes necessary to do an in-person verification. Therefore, e-KYC facility needs to be provided in such cases as well," the report noted.

First Published: Sat, February 15 2020. 15:00 IST
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