The retail and Institutional segments in India trade from over 1500 locations in over 10 assets class. Besides the Equity, well developed Derivatives and Fixed Income segment, fast growing Currency and Commodities segment, a diverse Mutual Funds segment exist. The passing of the Insurance bill by the Parliament in 2015 marks a important step in developing this segment, though the larger Pension Funds segment and Insurance segment is still in infancy. The emergence of new segments like SME segment, HNI segments etc. adds diversity and growth of the Indian Capital Market.
Year 2014-15 witnessed significant changes in enabling FIIs to invest in India. Key changes included Introduction of new KYC norms, FPI regulations (* detailed note in said section), Depository Receipts related developments easing of FDI norms. This, besides a stabler and progressive Central Government. The major trends that have emerged in the Indian Securities Services domain, that significantly influence the face of Securities Services are:
These trends will be key drivers leading to growth of pan India players, reflecting Institutional and retail clients aspirations of a Securities Services provider.
The developments in India have, increased the need for full fledged Securities services providers. Provider beside being well Capitalised need technology driven solutions and local market expertise. Providers are expected to understand the needs and complexities required to provide a diverse product mix, ensure a high degree of confidentiality, engage in straight through processing and adopt risk containment measures and best practices.
As Capital Market grows, the diversity of services needed to address the complexities will also evolve and grow.Developments of Market infrastructures in payments and securities businesses being key factor in the reduction of systemic risks will play a pivotal role in the building of a unified market.
Investors and intermediaries in India face a number of complexities ranging from non-availability of key data necessary to make informed decisions, to multiplicity of Stock Exchanges, Settlement Processes, Depositories and Regulators. Operational complexities include:
The above challenges impact business decisions and strategy, operations, service quality, and consequently margins and market share.