Attracting FPI Investors: Fixing perceptions, driving solution
Last week we released a paper on the above topic.
The Indian economy is showing signs of stability and greenshoots, the Capital Markets are registering new IPOs, Wealth creation is on rise. Is that good enough to attract FPIs?
We feel there are 6-easy-to-fix aspects wrt the capital market Infrastructure that can make Indian Capital Markets more attractive. Here is a summary of our view, as in the above release :
Faster- Its possible to register as a FPI within a week to the current 3-4 weeks
Efficient- enable the conversion of ONLY NON-BANK Custodian to becoming Custodian Banks
Competitive- Enabling interest payment to FPIs (wrt their SNRR account balances)
Enable Clearing corporation Interoperability -potential to reduce costs by 25% to 35%
Informative (The FPI Handbook of BSE-ICCL/ SEBIs FAQ/ BSE and NSE’s website for International Investors/ NSDLs website for FPIs are good initiatives) make information easily available, in a simple format, addressing the Information needs of the Investing clients. We concentrated on the same as we partnered BSE-ICCL in the preparation of its Handbook for FPIs. Ask for your copy of its 2016 edition. The website will be more enabling.
Encouraging India based Custodians and other intermediaries to Outsource: Bring down the operations costs. Many a Global Institutions in the Broking and Securities Services space have set up large Centers of Excellence in India for their global operations-in effect outsourced to India. Time India based Institutions replicated the model, to reduce their costs.
At PIVOT we believe the above initiatives will benefit all class of FPIs, Custodians, Brokerages, Banks, develop capital market Infrastructure and more importantly raise the attractiveness of Indian Capital Market. This also will address the Foreign Investors perception(especially of the much vaunted Category III)- that India is a difficult market to access.The developments at the Exchanges, Clearing Houses, Depositories in India, holds many a pleasant surprise for Investors.
My interactions with Indian Regulators(SEBI) as well as SROs(Exchanges, Depositories, Clearing Corporations) is- they are proactive, listen and engage in change.
Do write in case you wish to have the full copy of the release. We will shortly post on our website as well.