The Finance Ministry has promised that its recent policy announcement to allow foreign individual investors to directly invest in equities would soon be operationalised.

The relevant circulars would be issued by RBI and SEBI in next few days without their having to overcome the usual bureaucratic hurdles for implementation, Mr C.S. Mohapatra, Director in the capital markets division of Finance Ministry, told an Assocham summit on financial markets.

This policy announcement was made in the beginning of this month. It was then indicated that the guidelines would be notified in 15 days.

Mr Mohapatra also indicated that the capital markets division has not given up on its earlier efforts to rationalise the securities transaction tax (STT) as part of its attempts to bring down the transaction cost in the securities markets.

The capital market division had earlier held discussions with stock exchanges and other intermediaries on the issue of STT. Its attempts to rationalise STT met with stiff resistance from the revenue department and the Government decided not to pursue with the proposal.

Mr R. Nanda Kumar, Senior Vice-President of National Stock Exchange, said that bringing down the cost of transactions in Indian securities market is the key in the current difficult times. He also maintained that the current uncertainty is an opportune time for countries like India.

On the state of the capital markets, Mr Mohapatra said that there was no need to get pessimistic at all. “But that should not make us complacent about ushering in second generation reforms.”

Mr Rajeev Kumar Agarwal, Whole-time Member, SEBI, said the capital market regulator was working towards ushering in changes to the entire process of initial public offering (IPO).

Mr Rashesh Shah, Chairman of Assocham National Council for Capital Markets, stressed the need for greater flow of savings into capital markets for their productive use.

>krsrivats@thehindu.co.in

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