Debt market push

One person who was all smiles after hearing the Prime Minister at Sebi Bhavan was Nimesh Kampani. As chairman of CII's Capital Market Committee, he has put debt market development at the top of his agenda. With the PM endorsing the need for policy measures to make the debt market "broader, deeper and more liquid", the industry is hoping that after a decade of stagnation, there will be some movement forward, instead of mere committees and promises. It is important to remember that the National Stock Exchange (NSE) opened for business by seeking broker-membership to its debt segment. While the NSE's role in capital market development is justifiably lauded, it failed to make any headway in debt. In fact, debt market brokers lost their business because plans to develop the corporate bond market failed to keep pace with the RBI's negotiated dealing system for government securities which eliminated brokers altogether. In May this year, an internal Sebi committee decided that that the Bombay Stock Exchange (BSE) will be the chosen exchange to create a reporting platform and later a trading platform, including a separate clearing and settlement mechanism for debt. This too has made little headway yet.

Power centre

When the market watchdog moves to the environment friendly, high security Sebi Bhavan at the elite Bandra-Kurla financial district, its old office will continue to remain a powerful nerve centre. Fittingly, the Forward Markets Commission (FMC) will move into Mittal Court 'B' at Nariman Point. Commodity futures trading in India was re-started after a gap of 40 years, so the FMC still has the status of a relatively junior regulator; but trading volumes are growing at astonishing pace and globally, commodity trading far outstrips the capital markets. Naturally, foreign investors are lobbying hard to be allowed entry into the market, especially since India has emerged as the world's biggest consumer or producer of several key commodities. A bigger and better office for the commodity regulator is long overdue, but as FMC chairman S. Sunderasan says, "well will need a few more years before we can pitch for our own Bhavan."