Tighten forex rules: Sebi panel

According to sources, members expressed satisfaction at the steps taken by Sebi to regulate the capital market. But the forex market could do with some more regulation, they felt. This seems to be a universal view among regulators around the world. At a recent meeting of international regulators it was concluded that the currency speculation in the south-east Asian economies had precipitated largely on account of poor regulation of the forex markets.

The panelists also agreed that derivatives trading should be introduced at the earliest, especially to meet the hedging requirements of the forex market. In fact, they said that FII investments into the country would move up if they were allowed a hedging facility for all kinds of investments. The panelists also discussed the state of the primary market and commented that the resource raising process had indeed been on a real downhill. Only the mutual fund industry had been able to do better, they concluded.