The capital markets reform agenda is finally ready. The blueprint for financial sector reforms chalked out by the government-appointed Percy Mistry Committee has called for a series of measures. These include: ushering in capital account convertibility by 2008, allowing foreign investors to buy Government of India bonds, creating immediately a currency spot market for financial entities and unifying all financial trading under the Securities and Exchange Board of India.

The goal of the recommendations made by the committee is to bring the Indian financial markets at par with global markets like New York and London by 2020. If the government implements the report in toto, the rupee could soon become globally accepted like the US dollar, the euro, the UK pound and the Japanese yen.

Finance ministry officials said the government was working on the proposals. These include setting up of a currency spot market for financial firms with a minimum ticket size of Rs 1 crore to impart depth to the markets, now dominated by equities.

An exchange-traded currency derivatives market could also be developed soon to work as a counter party market. It also wants FIIs to be allowed to buy government bonds just as they buy equities.

The committee’s recommendation for the development of the bond-currency-derivatives (BCD) market addresses what it calls the “missing markets, to attract global capital”. With international credit rating agencies having upgraded India to investment grade, the issue of GoI papers in foreign markets could also be considered, it adds.

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