Securities market regulator SEBI will consult every possible stakeholder before taking a final call on the regulations regarding algorithmic trading (algo)/high frequency trading (HFT).
Speaking on the sidelines of a CII event in Mumbai on Tuesday, SEBI Chairman UK Sinha said, “I hope you have been able to offer your comments on the discussion paper...., have you, because we have wanted a very open discussion on the various aspects of colocation and algo trading.
“We have received a lot of feedback, we even have a technical advisory committee of SEBI and the TAC looking into it. After that we propose to have interactions with various groups, for example the technology providers for HFTs, firms which are actually using HFT, small brokers, small traders, investment advisors, investor associations, RBI and the government. We will have a wide ranging consultations. Then a final view will be taken.”
Sinha mooted the idea of a common bond market for the BRICS countries akin to the recently formed development bank for BRICS countries.
Joining hands “I would like to take a position that in today’s world, financial markets are beyond the control of national policy makers. We have reached a stage where national policy makers can no longer control the financial markets. And if we acknowledge this, then there is all the more reason for all of us in the BRICS countries to come together share our experiences and learn from each other,” he added.
Pointing to the unconventional monetary policies being used by several central banks across the globe, Sinha felt that these actions had a significant impact on the bond markets worldwide.
“My last point is about the issue which we have with regard to macro-prudential and international financial issues. Post the global financial crisis, the unconventional policies which the central banks have been following for a very long time are creating serious challenges and uncertainties in the growth of the bond market. The volatile nature of the capital flows for any ‘sneezing’ by a central bank can create wide fluctuations and consternation in the bond markets.”
“And there is also a serious flaw in the transmission of this unconventional monetary policy. The broad money supply again from 2007 has increased by more than $9 trillion. But the actual flow to the private sector is hardly $1.8 trillion
A vibrant bond market can develop and survive only if there is international interest, Sinha said. So the prolonged existence of easy money and now negative interest rates, are creating their own uncertainties as far as bond markets are concerned, he concluded.