Mumbai (Maharashtra) [India], August 20 (ANI): Widening market breadth and enhancing price discovery across asset classes remain vital to driving India’s financial ecosystem, said Kamlesh Shroff, President of the Association of National Exchanges Members of India (ANMI).
Speaking to the media on the sidelines of the ASSOCHAM IX National Summit & Awards on Corporate Bond Market in Mumbai on Thursday, the ANMI President shared detailed perspectives on regulator actions, market infrastructure, and structural debt growth.
Commenting on recent regulatory measures, he highlighted SEBI’s penal action against market entities involved in price spikes during specific trading windows.
“I think the signal which has come through… on the last six days before whatever 99 per cent of the trades that happened and the spike in the Sensex prices, and two people being penalized for that, maybe that’s the signal that SEBI wants to send,” Shroff remarked.
Addressing the impact of extended post-close trading windows on Consolidation and Settlement (CAS) mechanisms and price discovery, Shroff emphasised that allowing wider order placements expands overall depth.
“There is a talk that the 3:20 to 3:50 window can even have more and more orders… When that after 3:20 trades get into orders, go into the system, it will have a larger depth from that perspective. So the matching will also have a better price discovery,” he explained.
On being asked about ongoing regulatory oversight and structural improvements by SEBI and CAS, Shroff noted that the regulator is closely monitoring structural shifts.
“I think SEBI is taking a full view of what is actually happening with the exchanges… They have all the points and they are watching it quite carefully and through the lens of a microscope,” Shroff said, adding that market participants will observe data closely, particularly around major market expiries.
Shroff welcomed initiatives outlined by SEBI’s Whole Time Member (WTM) Amarjeet Singh, specifically the Fixed Income Channel Partners (FICP) framework via NISM and the riskometer concept.
On the issue of FICPs expanding reach, he said, “Channel partners are always an important aspect to grow your business… They are the ones who can actually advise, create awareness to all the people across all the pin codes. So it’s a good system and a way forward.”
On the riskometer aspect, mentioned by the SEBI WTM at the summit, he noted, “Riskometer can show for a AAA rating versus a BB or C rating, the risk that is there… large players can actually even look at building a portfolio of these debts with a little bit of risk.”
Discussing Online Bond Platform Providers (OBPP) and technology-led tokenisation, Shroff noted that OBPP platforms now host 15-17 lakh investors, bridging a market long dominated by institutions.
“Tokenisation through technology does help in terms of improving the market depth and breadth… You can buy a small piece of that particular item… It is a good step in the right direction,” he observed.
Sharing his inputs on corporate bond liquidity, Shroff stressed that 95 per cent institutional dominance creates structural friction for the 5 per cent retail base.
“Liquidity is what market is all about… If you don’t have liquidity, price discovery comes into play–the disadvantages of selling at a lower price, buying at a higher price,” he said, asserting that newly introduced market platforms require time to mature and build secondary market liquidity. (ANI)
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