SEBI to make the system more transparent

Author: Neha Dhamija

SEBI in its move to track the happenings in Financial Market more effectively has started issuing instructions to FIIs and custodians to submit the data on position of Indian securities which they lent overseas. This is being done to know if there exists any correlation between the domestic selling of shares and the overseas lending.

Further analysis can reveal if the overseas lending of securities by FIIs is causing any pressure in the domestic markets. This in turn will clarify the way things operate and help in coming up with more effective controls. Guidelines of FIIs that are operating in Indian Market and is lending to another FII that works abroad are also not well defined.
	The act will also add to the transparency of the market as the information will be made available on the website, for two days a week, Tuesday and Saturday. But abiding by this rule will lead to some difficulties for FIIs, according to some advisors. Moreover, an issue as to whether SEBI or RBI should regulate this is felt by some. Again, because a previous decision of SEBI to ban P-notes went unopposed by RBI, this instance too stands chances of RBI not coming in the way.