India’s financial markets regulation framework on 11th June 2015 stood up at the highest ratings from the global bodies of banking and capital market regulators, with RBI and SEBI being rated better than their competitors in China and the US.

In the latest global ‘assessment study’ of the regulatory framework for financial market infrastructure, only six countries, including India, have got the highest score of ‘4’ for all eight parameters on a scale. The other five countries are Australia, Brazil, Hong Kong, Japan and Singapore.

What is Rating 4?

The ‘Rating Level 4’ means that the financial market regulators like the Reserve Bank of India and the Securities and Exchange Board of India have all regulatory measures “fully in force.

How does Annual Assessment work?

The annual assessment studies the implementation status of the international Principles for Financial Market Infrastructure (PFMIs) in myriad countries. These PFMIs work as global standards for the financial sector entities across the world and have been finalised by the International Organisation of Securities Commissions (IOSCO) and the Bank for International Settlements (BIS).

About IOSCO AND BSI

IOSCO:

• IOSCO is a global grouping of capital markets regulators in different countries, including SEBI.

BIS:

• BIS is known as the central bank for all central banks across the world.

According to the study:

1. The study showed that SEBI and RBI have put in place all necessary regulations for the PFMIs.
2. They also “have a legal capacity to implement the responsibilities” outlined under these global standards.
3. The US has scored the top most rating of 4 on five out of total eight parameters.
4. China has got three top most scores.
5. The European Union scored the top rating on six parameters.
6. India has scored top ratings on all these counts.
7. The assessment took into account regulations for central counter parties, trade repositories, payment systems, central securities depositories and securities settlement systems.