Rolling settlement, a vital component of the capital market reform, would bring in certainty of trades, reduce risk and delay in settlement and keep excessive speculation under control, the finance minister said while inaugurating a meeting of the emerging markets committee of the International Organisations for Securities Commissions (IOSCO).

Apart from the need for evolving these, it was necessary that the regulators coordinate and cooperate among themselves, within and outside the country, the finance minister said.

In his welcome address, D R Mehta, chairman of the Securities and Exchange Board of India and chairman of the Asia Pacific Regional Committee of IOSCO, called for best international practices to make the markets modern in systemic terms.

Suchpractices included clearance of securities transactions through clearing houses or corporations, covering their counter party risk, dematerialised trading, rolling settlement, risk hedging mechanism and continuous disclosures by the corporates.

He also suggested steps to contain risk and volatility and multiplicity of regulatory agencies within a country. Corporate governance was yet another matter for concern. Unless the companies made efforts to maximise the shareholders value, the capital markets were unlikely to grow and improve qualitatively.

Paul K Melly, chief executive of Kenya's capital markets authority and chairman of the Emerging Markets Committee (EMC) of IOSCO, said there was need to build a global financial system as there would be no one market that could resist on a sustainable basis the pressure of globalisation.

The issue that would come up at the EMC meeting are impact and role of foreign institutional investors, corporate governance and regulatory framework.