SEBI, RBI work on bond indices, faster FPI onboarding

The Securities and Exchange Board of India (SEBI) and Reserve Bank of India (RBI) are collaborating to introduce bond indices and related derivatives trading, while simultaneously accelerating the process for foreign portfolio investors (FPIs) to enter the Indian market, stated SEBI Chairman Tuhin Kanta Pandey. "Bond indices trading on exchanges" is one of the topics SEBI is actively researching, according to Pandey.

The RBI has reportedly drafted guidelines and requested feedback, and they are working together to finalize them. The regulators are focusing on simplifying FPI onboarding, aiming to reduce the process from potentially more than a month to around five days. SEBI has already implemented digital signatures, e-Power of Attorney, a common application portal, and tracking systems, minimizing the use of physical documents, notarisation, and apostille requirements.

The RBI is also considering certifying FPI registration documents through foreign commercial banks using the SWIFT network. The ultimate objective is to facilitate capital allocation decisions by investors, while regulators work to streamline market access. SEBI is also developing a market-making framework that includes liquidity, market infrastructure, and repo access, as well as proposals for Fixed Income Channel Partners to enhance distribution via regulated online bond platforms.

Pandey clarified that SEBI hasn't formed a committee to examine stock exchanges trading their own shares, a matter of concern following recent reports. SEBI aims to continue simplifying regulations while expanding investment opportunities, with the next phase of market development relying heavily on technology. However, Pandey emphasized that human decision-makers remain accountable for investment choices.