financial system development mumbai

7/28/2019 Financial System Development Mumbai

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FINANCIAL SYSTEM DEVELOPMENTPATH OF MUMBAI


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prepared by

DR. BANDI RAM PRASADPresident

Financial Technologies Knowledge Management Company Limited

[email protected]

FINANCIAL SYSTEM DEVELOPMENTPATH OF MUMBAI

Disclaimer

This report is prepared to enhance awareness and or education and inormation. The inormation provided is taken rom sources believed to be reliable but is not

guaranteed by Financial Technologies Knowledge Management Company (FTKMC) as to its accuracy or completeness. This report is made available on the conditionthat errors or omissions shall not be made the basis or any claims, demands, or cause o action. Readers using the inormation contained herein or any strategic

decisions are solely responsible or their action. FTKMC or its representative will not be liable or the readers investment/business decision based on this report.

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being a leading provider o solutions and services in the realm o nancial sector knowledge. FTKMC is

engaged in the design o domain knowledge across major asset classes and oers numerous products and

services in the realm o executive education, nancial literacy, nancial certication, research, consultancy,and advisory.

FTKMC caters to the ollowing major constituencies: policy makers and regulatory authorities on subjects

such as growing importance o fnancial markets in the economy and aspects o governance and management;

fnancial institutions on market development strategies, resource mobilization, and risk management;

corporates and other business entities on the scope o harnessing and accessing fnancial markets and issuing

securities and other instruments; intermediaries on the skill-sets and expertise required to operate in multi-

asset-class markets, including trading and settlement; students to prepare them with knowledge and know-

how or successul careers in fnancial markets; andinvestors to empower them with proper understanding

and appreciation o the opportunities in the fnancial markets and risk and rewards associated with fnancial

investments.

FTKMC has carried out knowledge management projects in China, Singapore, Maldives, Kenya, Ethiopia,

and Mauritius in addition to numerous corporates and nancial institutions in India. FTKMC has successully

conducted nationwide programmes providing research, training and consultancy services in promotion o

market development in major segments such as commodity and currency utures, as also extensive content

development in the nancial markets.

For more inormation, please visit www.tkmc.com


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Introduction

Mumbai enjoys the distinction o being the nancial capital o India. A city comprising

seven islands, which was well connected even in 1845, Mumbai has a long history o

establishing trade relationships with Rome as early as in 300 BC. The rst o the oreign

powers in Mumbai were the Portuguese who arrived in 1498 and named the city as

Bom Bahia, which means good small bay. The British East India Company took control

o Mumbai in 1668 or a measly sum o 10 pounds and in 1857, ollowing the rst

war o independence, the city came under the direct rule o the British Government.

Administratively, Mumbai is the capital o the Government o Maharashtra State that

has close access and borders with states such as Gujarat, well known or its cooperative

movement and conducive business environment; Madhya Pradesh that has important

trading centres; and Andhra Pradesh, which is popular or sotware industry. Mumbai is

ranked ourth biggest city among the 30 urban agglomerations in the world by a recent

study by PricewaterhouseCoopers.

Mumbai has a long history o nancial system development. These developments

orm a subculture o a strong nancial system in terms o innovations and instruments

ancient India was known or. Prakash Tandon1, who chronicled the history o growth and

development o Punjab National Bank, one o the Indias premier banking institutions,

noted, Particular attention is given to the developments in Indiatrade, trade routes,

economic and nancial institutions like the guilds, commodity dealings, coinage in

diverse orms and the invention o many instruments o trade, credit and banking. These

inventions and innovations are shown to have been strewn over the Indus Valley, through

the Vedic, Mauryan and Gupta eras to the Khiljis, Tughlaks, Mughals and Europeans in India.

Jignesh Shah2, in his book that traced the origins o commodities trading in India, notes,Through the many phases o urbanization in India, it is clear that the expansion o trade

and the development o markets were central to the development o not only cities and

the urbanscape, but also the growth o the kingdom and civilization itsel.

1Prakash Tandon, 1989, Banking Century, A Short History o Banking in India and the Pioneer Punjab National Bank, Penguin

Books2Jignesh Shah, Biswajeet Rath, 2010, Back to the Future, Roots o Commodity Trade in India, Takshashila Academia o Economic

Research, Mumbai


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Stock Market Development in Mumbai: A Peak into

History

The American Civil War (1860-61) led to the sudden surge in demand or cotton rom

India, which resulted in a number o joint stock companies coming into being with

issuance o securities. Suddenly there was a share mania that gripped the city o Bombay

with the market unctioning rom three dierent places; between 9 a.m. and 7 p.m. at

the junction o Meadows Street and Rampart Row; rom day break till 9 a.m. and rom 7

p.m. to the early hours o next morning at Bazargate.

Sugar Market at Mandvi was another place. Between March 1864 and July 1865,

speculation was so rie and rampant that the market consisted o more than 1,000

brokers. Share price rose sharply; a share o Coloba Land Company rose rom Rs 10,000

at par to Rs 1,20,000 and that o Backbay Shares went up rom Rs 2,000 to Rs 54,000.Bombay was a major nancial centre even as early as in 1865; it had 31 banks, eight land

reclamation companies, 16 cotton-pressing companies, 20 insurance companies and 62

joint stock companies.

During the years 1864-65, the whole community o Bombay rom the highest English

ocials to the lowest native broker, utterly demoralised and abandoning business, gave

themselves up to the delusion that they could all succeed in making ortunes on the

stock exchange," noted a newspaper o that time, which prompted the then Governor,

Sir Bartle Frere (1862-1867), to orbid all civil servants to indulge in speculation and

reused to promote those who disobeyed the order. A ew ound it more rewarding to

disobey. J.M. Maclean (1835-1906), a high-ranking British ocial, was reported to have

said, "I have made more money out o these shares than I have saved during all my

service in India and I don't mean to give up."

All the trappings o a rising market were in evidence: tips, rumours, astrological orecasts,

press interviews. People gambled on anything: stocks, silver, and even rainall. The

Bombay Guardian newspaper reported in 1872 an interesting incident o betting on the

rain or Barsat Ka Satta. "The rage o speculation o people in this country is extraordinary.

It nds vent in the chances o a day being rainy or otherwise. Over a hundred people,

most o them Marwaris, assemble, it is said, in a chawl near Khetwadi daily to bet on

the probability o the rainall." There were a ew modern day Nick Leesons too. Chunilal

D. Saraiya (1862-1913), manager o India Specie Bank, bet so heavily on silver, which

made the bank to lose one and quarter million, leading to its closure. The original BigBull was Premchand Roychand who was also well known as the Cotton/ Bullion King.

When he was on a visit to companies or banks, hordes o people used to ollow him or

either a tip or an insight. He could persuade banks to lend huge sums o money or share

business that urther buoyed the boom market at the time. An ordinary broker around

1865 earned about Rs 200 per day, a huge sum in those days.


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The party, however, did not last long. On July 1, 1865, when hundreds o "time bargains"

had matured, which buyers and sellers alike deaulted, led to the burst o the bubble.

Never had I witnessed in any place a run so widely distributed nor such distress ollowed

so quickly on the heels o such prosperity," thus wrote Sir Richard Temple, who servedas the Governor o Bombay. A share o Bank o Bombay, which touched Rs 2,850 at the

peak o the market, slumped to Rs 87 in the atermath o the bust. Despite the intensity

o the crisis, most o the brokers met their commitments.

Banks, on whose building steps brokers used to hover around or tips and trades, ound

it a big nuisance in the atermath o the crash and drove them away out o their premises,

which orced them to nd a place o their own, which later turned out to be Dalal Street.

Beginning with doing business under a banyan tree, a group o 318 persons ormed

the stock exchange in July 1875, which led to the ormation o a trust in 1887 known as

Native Share and Stock Brokers Association, which in later years came to be popularly

known as Bombay Stock Exchange.

Measures to modernize the Indian capital markets began as a part o the economic

and nancial sector reorms by setting up a regulatory authority or securities markets

(Securities and Exchange Board o India, 1992), a national stock exchange (National

Stock Exchange o India, 1992), dematerialization and a depository system (National

Securities Depository Ltd and Central Securities Depository Ltd,1995). In 2007, MCX

Stock Exchange was recognized as a third national stock exchange in addition to BSE

and NSE.

Source: From an article on stock market development contributed by the author in the Business Line, April 27, 2001


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Competitive Advantage of Mumbai

Mumbai has several unique eatures that makes it a competitive city that attracts

business, people and investments rom India and abroad. Apart rom being located in

a avourable time zone (GMT+5.5 hrs) that provides Mumbai with access to markets in

Arica, Europe and the Middle East during the day time, and the US also to some extent in

the evening (which has relevance or trading in commodities/currencies), it is endowed

with numerous other eatures that add to its competitiveness.

Historical

Mumbai was a major port and nancial city under the British India

Well-developed inrastructure as compared to other urban

agglomerations

Legacy o a well-designed municipal administration

Long presence o nancial markets and institutions

Presence o indigenous enterprise and local markets

Presence o a wide range o market-related institutions and

intermediaries

Cultural

Multi-cultural population, diversity o liestyles and representativeo a cosmopolitan city

A steady stream o migrant population rom dierent parts o thecountry

Gender balance, saety and securityA relatively higher degree o law and orderStrong presence o communities known or entrepreneurship and

enterpriseProessional approachWell-developed inrastructure or education and skill developmentDemographic dividend. About 65% o Indias population will bearound 35 years o age in the next decade

Financial

Financial capital o IndiaHeadquarters o regulatory authorities o banking, securities and

commodities markets

Presence o a large number o nancial institutions, including

Indias biggest commercial banks, stock exchanges, commodity

exchanges, clearing corporations, rating agencies, inormationservices companies

Presence o leading oreign institutional investors, investment

banks, private equity rms

Sophisticated trading, clearing and settlement platorms and

processes in various asset classes and nancial market segments

Location o treasury unctions o leading corporates, banks and

other nancial institutions

Location o sel-regulatory and industry associations in the realm

o banking, securities rms, orex, xed income and mutual unds

Well connected with regional and international nancial centres

Persons o Indian origin holding leadership positions in several

international nancial rms


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Contribution of Mumbai

Mumbai, being the business and nancial capital o India, makes signicant contribution

to size, growth and development o numerous segments o the real economy and the

nancial markets. Several innovations in the Indian nancial markets originated in

Mumbai, which include:

Stock market culture in IndiaFinancial markets regulationSpot and utures and other derivatives tradingElectronic and online trading

National stock exchanges (NSE/BSE/MCX Stock Exchange)

Credit rating agencies (CRISIL/CARE)

Sel-regulatory institutions (IBA, AMFI, FIMDA, FEDAI, etc.)

Securities settlement; T+2 days

Dematerialization and depositories: NSDL/CDSL

Multi-asset-class trading platorms (Financial Technologies Group)

Modern commodities markets (MCX/NCDEX)

Growth o currency derivatives (MCX-SX)

Biggest private sector collateral management or Agricultural markets (NBHC)

Spot markets or agricultural commodities (NSEL)

Besides, Mumbai also contributes sizably to various segments o nance and the

economy.

5%10%

20%

25%

40% 40%

60%

70%

GDP Central

Excise Tax

Industrial

Output

Foreign

Trade

Income

Tax

Customs

Duty

Financial

Transactions

Factory

Employment

Mumbais Contribution to India


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Size and Significance

Mumbai accounts or a major chunk o the nancial activity in India. A sizable part o

the business o commercial and investment banks, exchanges, securities rms, private

equity and other nancial services operate rom Mumbai as the base. The ollowing

table highlights the share o Mumbai in major nancial activities.

Particulars Size ($ bn) %

Bank Deposits* 210 20

Bank Advances* 183 24

Cheques Cleared 431 19

Trading in Equities (Cash Market) 752 61

A large part o the derivatives traded on various exchanges across asset classes,including equities, commodities, xed income and currency, also originates in

Mumbai.

*as o September 30, 2010

The signicance o Mumbai could be measured rom the presence o premier

institutions across all major constituents o the nancial sector, as could be seen rom

the ollowing.

Particulars Institutions

Regulatory

Institutions

Reserve Bank o India (banks), Securities and Exchange Board o

India (securities), Forward Markets Commission (commodities)Exchanges Bombay Stock Exchange, National Stock Exchange o India,

MCX Stock Exchange, MCX, NCDEX

Banks with HQs State Bank o India (Indias biggest), Bank o India, Bank oBaroda, IDBI, ICICI Bank, HDFC Bank

RenancingInstitutions

National Bank or Agriculture and Rural Development (NABARD),Small Industries Development Bank o India (SIDBI), EXIM Bank

Main Oces oForeign Banks

Citibank, Deutsche Bank, HSBC, Standard Chartered, and 40other oreign banks are present in Mumbai

Investment Banks Enam Securities, Morgan Stanley, ICICI Securities, DSP BlackRock, JP Morgan,

Private Equity CLSA Capital Partners, KKR India Advisors, Temasek HoldingsAdvisors, HSBC Private Equity Advisors, Khazanah National

Auditors &Accounting Firms

A F Ferguson, Haribhakti & Co.

Legal Firms Amarchand & Mangaldas & Suresh Shro Co., Mulla & Mulla, &Craigieblunt & Caroe

FIIs CLSA, Daiwa Securities, Nomura Financials

Rating Agencies Crisil, CARE, Fitch Ratings

Share Registries MCS Ltd, Link Intime, Sharepro Services, TSR, Darashaw

SROs Indian Banks Association, Association o Mutual Funds o India,Fixed Income Money Market & Derivatives Association

Inrastructure IL&FS, HDFC Ltd

Corporates Reliance Industries, Aditya Birla Group, Tata Group, Godrej,Essar, Mahindra & Mahindra, Financial Technologies


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A large part o the growth in Indian capital markets in terms o business and expansion

is contributed by Mumbai. In the last ve years, Indian nancial sector has shown

exceptional growth, drawing on the strengths o nancial centres such as Mumbai. For

instance, bank deposits in India more than doubled rom $535 billion to $1,339 billionduring the ve-year period between 2005 and 2010, and bank advances rom $250

billion to $721 billion. There are nearly 5,000 companies listed in the Indian stock markets,

making Mumbai as a capital market with largest number o listings. During the 2005-10

period, stock market capitalization rose nearly three times, rom $553 billion in 2005 to

$1,631 billion in 2010, and stock market turnover rom $314 billion to $801 billion. There

are about 1,700 FIIs with their investments in Indian nancial markets through portolio

fows showing a sharp rise rom $9.5 billion in 2005 to about $40 billion in 2010. On a

cumulative basis, FII fows into India are in the range o $80 billion since the markets

were opened or oreign institutional investment in the early 1990s.

In 2007, Ministry o Finance, the Government o India, constituted a High Powered ExpertCommittee3 to examine various aspects o making Mumbai as an international nancial

centre. The Committee drew up an extensive report highlighting the advantages

Mumbai could oer as an international nancial centre and listed out various measures

in the realm o policy and market development required in this regard.

3Report o the High Powered Expert Committee on Making Mumbai an International Financial Centre, Ministry o Finance,

Government o India, New Delhi, 2007


10/18

Growth Trends

Mumbai is ast emerging as one o the most populous cities globally. In 1950, Mumbai

had a population o 2.9 million that made it 18th among the top 30 cities in the world.

By 1990, population o Mumbai rose to 12.3 million, making it the th largest populated

city in the world. In 2007, the population o Mumbai reached 19 million, making it the

ourth biggest urban agglomeration by population. By 20254, it is estimated that with a

population o 26.4 million, Mumbai will be the second biggest urban agglomeration by

population ater Tokyo.

GDP in Mumbai (estimated in PPP terms) was US$209 billion in 2008, with GDP per capita

at US$10,800. In terms o GDP basis, Mumbai is closer to other cities such as Sydney

($213bn); Singapore ($215bn); Madrid ($230bn); Shanghai ($233bn). In terms o size o

the GDP, cities such as (Tokyo ($1479bn); New York ($1406bn) and Los Angeles ($792bn)

are in the top o the league o cities.

In terms o the 2008 GDP level, Mumbai is ranked 29 and it gained more than 10 places

as compared to 2005, when it was ranked 37 on this basis. On the basis o GDP estimates

in 2025, Mumbai will move to 11th position among the top 30 cities in the world with a

GDP size o $594 billion.

Mumbai is also expected to show high rate o growth o GDP as compared to many

other leading cities with a projected rate o 6.3% or the period 2008-25. By 2025, its

rank in the GDP among the top 30 cities will move up signicantly to 11 rom 29 in

2008. In 2008, India had two cities among the top 50 global cities and this number will

move up to three by 2025. India will have nine cities among the top 100 cities in theworld by the 2025. In terms o GDP orecast growth or the period 2008-25, Tianjin and

Mumbai are more or less on an even keel with an average annual growth o 6.6% and

6.3%, respectively.

Mumbai was among the top 15 cities that recovered ast rom the impact o global

economic recession during 2009-105. Mumbai scores well in regard to growth and

development as compared to other indicators in the IFC development index.

4PricewaterhouseCoopers, Which are the largest city economies in the world and how might this change by 2025, UK Economic

Outlook, 20095LSE Cities; Metropolitan Policy Programme at Brookings, Global Metro Monitor, The Path to Economic Recovery, A preliminary

overview o 150 global metropolitan economies in the wake o the great recession, December 2010


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Cities

2010, % change on previous year, Forecast

Rank out of 150 Since recession low

Istanbul

Lima

Singapore

Shanghai

Rio de Janeiro

Mumbai

Austin

Bogat

Sydney

Tokyo

New York

Paris

Zurich

Frankfurt

London

Athens

Madrid

Las Vegas

Dubai

Dublin

1

3

4

6

10

12

26

31

45

96

101

113

123

141

142

146

149

150

52

77

Income* Employment

-8 -6 -4 -2 0 2 4 6 8 10 12 14

Source: Brookings/LSE Global Metro Monitor *Gross Value Added per person

Mumbai

200

150

100

50

0

Shanghai Rio de

Janeiro

Sao

Paulo

Istanbul MexicoCity

Buenos

Aires

Moscow

London

Chicago

New York

Tokyo

Philadelphia

LA

Paris

Osaka

Cumulative Projected GDP Growth for Mega Cities% Cumulative Real GDP Growth: 2008-25

Top 8 Emerging Economy Cities Top 8 Advanced Economy Cities

Source: PwC analysis


12/18

Mumbai scores high in respect o indicators such as growth and development. In the

Xinhua-Dow Jones International Financial Centers Development Index in Asia, Mumbai

ranks high in indicators such as growth and development, nancial markets and

industrial support as compared to other general eatures such as services and general

environment. The current ocus and thrust o the Government in promoting Mumbai

also includes enhancing the quality o the general environment and the scope o services

that could urther reinorce the strength o the growth and development indicators and

step up the process o making Mumbai an international nancial centre.

Profle o the International Financial Centres Development Index in Asia

International

Financial

Centre

Development

Index

Rank Financial

Market

Growth and

Development

Industrial

Support

Ser vice General

Environment

Asia

Singapore Singapore 70.06 6 63.52 71.46 75.34 69.04 71.29

China

Hong Kong 81.01 4 81.5 84.25 86.23 76.87 76.35

Shanghai 63.75 8 64.93 87.43 72.11 47.84 46.45

Shenzhen 40.53 22 44.9 57.31 30.61 25.84 43.09

Taipei 31.05 41 33.6 36.42 31.95 26.95 26.19

Beijing 55.91 13 57.67 83 61.6 38.21 38.92

UAE Dubai 53.59 14 47.66 67.88 60.01 48.45 44.26

JapanTokyo 85.55 3 86.52 81.77 93.64 86.72 79.5

Osaka 33.02 38 32.7 32.56 35.77 34.35 29.87

India Mumbai 31.52 40 35.78 42.43 33.47 22.42 23.32

Korea Seoul 35.02 31 33.89 45.28 41.52 29.28 25.31Source: Xinhua-Dow Jones International Financial Centers Development Index, July 2010

Mumbai among the Top 30 Urban Agglomerations in the World

Mumbai Population (mn)

209

594

2008 2025*

GDP PPP ($bn)

2.9

1950

15

12.3

1990

5

19

2007

4

26.4

2025*

* ProjectionsIndicates Rank

Source: PwC Analysis

3 29 11


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Mumbai and Tianjin

Tianjin has the distinction o having the rst stock market and rst bank. Mumbaitoo had one o the earliest stock markets in India. Pinghuai Stock Company was the

rst stock exchange in China set up in Tianjin in 1872, which is also known or the

establishment o the rst banking institution. The ormal stock exchange o Mumbai

came into being in 1875. Mumbai has access to one o the best sea ports in India; Tianjin

also has. Mumbai is known as one o the prominent centres or nance since long, and

Tianjin was earlier known as one o the biggest nancial centres in China. Both these

centres have ambitious plans to emerge as leading nancial centres. While Mumbai

pursues its aspirations to emerge as an international nance centre on the back o strong

nancial markets development, avourable time zone, wide connectivity to the rest o

the world, and availability o skilled proessionals, Tianjin is working towards emerging

as a strong regional nancial centre on the back o a strong domestic economic growthand rapidly growing asset markets that will complement the benets brought in by

leading nancial centres such as Beijing, Shanghai and Shenzhen. Tianjin orms a part

o the development plan o the Tianjin-Bohai region that could bring the benets o the

regional development in making it a vibrant regional nancial centre. Tianjin Financial

Assets Exchange is an important addition to the nancial innovations in the centre as

it provides a nationwide platorm or trading o all types o nancial assets, which is a

unique market institution in the emerging markets.


14/18

Towards Making a Successful Financial Centre

While every major city or nancial centre has certain natural benets arising rom legacy

and location, the ocus on modern nancial policy is to create centres o growth and

excellence by design and development o suitable nancial architecture comprising

institutions, instruments and investors. It is in this context that concerted eorts

in capacity building and inrastructure creation assume signicance. International

nancial centres such as London retain their primacy among the global nancial centres

because o continuous and consistent eorts to restore competitiveness.. A ew aspects

related to making successul nancial centres and sustaining the growth momentum

are discussed below.

Infrastructure

Inrastructure is the key to the growth and development o the nancial centres. Well-

developed inrastructure in terms o telecoms, communications and connectivity within

and outside the country, will enhance the quality o the nancial centres in terms o

potential and prospects or growth.

Financial Architecture

Well-designed nancial architecture that encompasses a comprehensive ramework or

the nancial system comprising institutions in the realm o policy, regulation, market

practice, ratings and inormation, analysis, etc. are vital or a strong and sustained growth

o the nancial markets. The design o the market structure should be consistent with

promotion o competition and restriction o monopoly practices, which could hinder

the progress o the growth o the markets. Investor protection is another key part o the

design that will narrow the scope or market abuses, and better standards in governance

and administration orm the key aspects o institution building. Simultaneous with

development o regulated entities and institutions, the nancial industry should take

initiatives in creating sel-regulatory institutions that will address to the operational

aspects to be sorted out within the industry and leaving the larger aspects o market

development to the policy. In many countries where nancial markets emerged as a

larger economic activity, sel-regulatory institutions play a very important role. Growth

o sel-regulatory intuitions orms an important and integral part o the nancial

architecture.

Knowledge Development

Knowledge is the key to the success o the nancial markets. In some markets, despite

regulatory structure rmly in place, issues o market depth remain a major issue in view

o lack o enough market intermediaries with required experts and skillsets, who could

contribute to the growth o business. Countries like India and China have a long history

o indigenous enterprise and entrepreneurial competencies, but in both these countries

there is a huge gap or a ew decades. While this has not been a major constraint going

by the rapid surge o nancial markets activity in both these countries in the last two

decades, continuous thrust and ocus are essential to bring greater awareness about


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15

the potency and power o markets to a large constituency o proessionals engaged

in the nancial markets industry in the areas o policy, regulation and market practice.

Given the dynamism o the markets and rapid changes in the market correlations, equal

emphasis is required in stepping up the skill-sets o market intermediaries in variousaspects o the operations pertaining, and ront and back oce o the nancial rms.

The requirement o knowledge development and management spreads across various

layers o the nancial markets industry, including top management, in areas such as

governance and administration, best practices and better standards in compliance and

disclosure, strategies or market development, investor education and awareness, and

measures that could make markets saer and secure. In addition to mainstream academic

institutions that impart basic education in nancial markets, specialized institutions

will have an important role to play in capacity building, that could make a distinct

contribution to the growth o nancial markets and in the making o an international

nancial centre.

FTKMC: Knowledge for Markets

Financial Technologies Knowledge Management Company Limited (www.tkmc.com),

based in Mumbai, India, is a specialized institution engaged in the development o

domain knowledge in nancial markets and design o innovative products and services

that help in the development o nancial markets. Operating with a broad theme,

Knowledge or Markets, FTKMC is engaged in developing knowledge initiatives that

aim to address to the emerging requirements in policy, regulation and market practice

in the nancial sector. The constituents with which FTKMC engages include policy andkey decision makers and regulatory authorities on subjects such as growing importance

o fnancial markets in the economy and aspects o governance and management;

fnancial institutions on market development strategies, resource mobilization, and risk

management; corporates and other business entities on the scope o harnessing and

accessing fnancial markets and issuing securities and other instruments; intermediaries

on the skill-sets and expertise required to operate in multi-asset-class markets, including

trading and settlement;students to prepare them with knowledge and know-how to help

them with successul careers in fnancial markets; and investors to empower them with

proper understanding and appreciation o the opportunities in the fnancial markets and

risk and rewards associated with fnancial investments. Its primary ocus is to enhance the

quality o market practice and various other aspects that are o relevance and signifcancein building strong and sustainable fnancial markets. With particular ocus on institutions,

instruments and investors pertaining to dierent asset classes, FTKMC develops

numerous products and services in the realm o nancial literacy, executive education,

academic collaborations, nancial training, examinations and certications as well as

consultancy, research and advisory that receive wide acceptance and endorsement

rom markets. The several international projects FTKMC is carrying out in various

countries include strong working relationships with GIZ, China, in market developments

initiatives, particularly in the realm o capacity development. FTKMC is a constituent o

the Financial Technologies Group that has extensive interests in design o technology

solutions in the nancial industry, multi-asset-class exchanges and clearing corporations

in various geographies, including Asia, the Middle East and Arica, and the development

o nancial markets ecosystem.


16/18

Global Approach and Perspective

Financial markets are intensely integrated in the world. In several aspects o the nancial

markets, such as banking, securities, commodities, currencies, certain standards o

operations in exchanges and Over-the-Counter markets are largely drawn rom an

international ramework that could be ound to be in adoption in a large number o

countries. For instance, in most o the exchanges, trading is electronic, depository

systems are prevalent, and securities settlement takes place within a given time rame.

Similarly, in derivatives, though underlyings may vary, the contract specications in terms

o price discovery, trading and settlement remain in accordance with global standards

and practices. In banking, too, several operations are aligned with the international best

practices. It is in the background o standardization o market procedures and practices

that scores o oreign institutional and individual investors ound numerous opportunities

to invest across a various markets on the strength o market similarity. In the long term,

the success o international nancial markets will, to a large extent, depend on theglobal approach to market development; not undermining the strength o the domestic

markets. Countries like India and China have made rapid progress in nancial markets

development in the background o robust growth o domestic nancial markets and

this will continue to be an important aspect in nancial policy. Processes and platorms

or regular consultations and interactions with national and international institutions on

various aspects o market development and operations should be promoted, that will

elevate the status and signicance o the nancial centre.


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17

A WEEKLY BRIEFING

ON MAJOR

DEVELOPMENTS IN

GLOBAL ECONOMY,

FINANCE AND

MARKETS

POSTGRADUATE

DIPLOMA IN

FINANCIAL

MARKETS PRACTICE,

JOINTLY WITHIGNOU, AND

COLLABORATIONS

WITH ACADEMIC

INSTITUTIONS

CONSULTATIONS AND

COUNTRY EXPOSURE

PROGRAMME ON

FINANCIAL MARKETS

FOR CEOs AND

SENIOR DIRECTORS

OF FINANCIAL FIRMS

A TWO-WEEK

PROGRAMME IN

FINANCIAL MARKETS

PRACTICE FOR

PROFESSIONAL AND

STUDENTS

AN ANNUAL REVIEW

OF DEVELOPMENTS

IN GLOBAL AND

DOMESTIC FINANCIAL

MARKETS

CERTIFICATE

PROGRAMMES ON

EQUITIES, DEBT,

COMMODITIES,

CURRENCIES


Exchange Square, 1st Floor, Suren Road, Chakala, Andheri (East), Mumbai - 400093. India.

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Financial Technologies Knowledge Management Company Limited (FTKMC)

enjoys the distinction of being a leading provider of solutions and services in the

realm of nancial sector knowledge. FTKMC is engaged in the design of domainknowledge across major asset classes and oers numerous products and services

in the realm of executive education, nancial literacy, nancial certication,

research, consultancy, and advisory services.


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Exchange Square, 1st Floor, Suren Road, Chakala, Andheri (East), Mumbai - 400093. India.

Tel: +91 22 6731 8888 Fax: +91 22 6726 9541

Email: [email protected] Website : www.ftkmc.com

financial system development mumbai

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