Sep 19, 2023
FPI flows don’t impact markets: Sebi ED
Foreign portfolio investors (FPIs) have no impact on the markets, according to VS Sundaresan, executive director of Sebi. Strong domestic inflows are now supporting the indices, he said.
Speaking at Assocham痴 capital markets summit The Re-set of Globalisation: Capital Formation@2047 for New India, Sundaresan said: 典en years back, Indian markets were completely driven by FPI flows. There was a saying ‘When FPIs sneeze, Indian markets get a cold.’ But, today, nobody bothers whether they are putting in or withdrawing money.He added that FPI data are 登nly for publishing in the newspaperswith no relevance to the markets.
He credited Indian market participants for not reacting to every small event, which has ensured volatility in Indian markets is 登ptimum and comparatively low vis-vis other markets. He added that India has strong investor protection mechanisms, which have catalysed retail participation in the markets.
He added that pioneering efforts by the regulator have kept India at the forefront of reforms, citing the USinterest in emulating the T+1 settlement system. He conceded that lack of investor awareness and too much regulation and litigation are certain weaknesses.
Pointing out that self-regulation is the need of the hour, he said the regulator should not be required to issue fresh norms to check malpractices at every step, calling on industry and participants to step up corporate governance policies on their own.
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