a)     Mr U K Sinha, Chairman, SEBI stated the need for introspection and developing business plans that help larger participation. He asserted that India definitely has an opportunity to figure as a favored financial destination given we introspect and improvise.

b)    Mr Uday Kotak, Chairman, National Committee on Capital Market, CII and Executive Vice Chairman and MD, Kotak Mahindra Bank highlighted the need to reform the tax structure and rationalize transaction costs to really make the markets more liquid and broad.

c)     Mr. Joseph Massey, and CEO, MCX Stock Exchange alluded that we should aspire not just to emerge as a global market but also as a global financial center, and for this what is required is to widen our investor base with a focus on “ investment oriented” long term view rather than trading oriented short term view.

d)      Mr Madhu Kannan, Managing Director and CEO, BSE, gave a snap shot of the global landscape where trading patterns have changed and global financial crisis has prompted consolidation and regulatory changes across the globe. Mr. Kannan stated that the domestic mutual funds are gradually becoming active. He highlighted the need for rationalization of Securities Transaction Tax across assets and within assets across products.

The 3^rd Capital Market Summit with the theme “Deepening Capital Market for Financing Growth” focused mainly on Capital markets contribution to wealth creation and wealth distribution in an economy and in the process helping in making capital available to investors. In emerging economies, capital markets have also been instrumental in heralding the process of financial inclusion through product innovation and financial education. Given India’s robust savings potential of around 30% of GDP, Indian capital markets hold immense potential to finance the growth process in India. However, markets require grooming to keep abreast of international standards and best practices. This would include developing the dormant corporate debt market as well as the cash market to enable channelizing the retail savings towards the capital markets.

The annual flagship highlighted the requirement to extend the reach of markets across the various strata of population and bring in efficiency and transparency along with technology upgradation and taxation reforms.

The key themes discussed by the speakers and panelists at the Capital Markets Summit are as follows:

• Rationalizing Tax Structure for Market Development

Indian Capital Market faces an unfavorable taxation regime due to the cascading effects of Dividend Distribution Tax as well as the distorting effects of STT. The Session delved into;

a)     Restructuring tax regime to revive capital market

b)    STT and Dividend Distribution Tax – removing the distorting effects

c)     Harmonizing transaction & income/capital gains tax

• Growth of Cash Market in India – Improving Depth and Liquidity

Indian Equity market suffers from low depth and liquidity in cash market. The major chunk of capital flow comes from the foreign institutional investors as compared to the domestic investors and majority of the flows are in the form of short term money from FII’s which makes the market highly volatile. This session delved into:

a)     How do we deepen the shallow cash market and improve liquidity?

b)    How do we bring in more retail investors into the market?

c)     Can Regulatory change help in deepening cash market in India?

• Corporate Bond Market – Financing Long Term Growth

An active corporate bond market is crucial for a vibrant India Inc. from the point of long term funding needs including financing for growth. The introduction of mandatory reporting of trades in corporate bonds is a welcome step as that helps in directing the market and improving market efficiency. It is also a progressive step that repos have been introduced in the corporate bond market. However, the challenges involved in developing an efficient bond markets include removal of tax distortions and bring in vibrancy in the corporate bond market, particularly the rupee convertible market. This also implies the need for a robust exchange traded secondary market. This session delved into:

a)     What are the constraints in raising the long term funding requirements from the capital market?

b)    How can we create a vibrant corporate bond market and develop a robust eco-system for corporate debt market development?

c)     What are the regulatory and policy changes needed?

The well attended conference attracted speakers of National and International repute. Some of the eminent speakers were from SEBI, Kotak Mahindra Bank, MCX Stock Exchange Ltd, India Infoline Ltd, KPMG, JM Financial Services Pvt Ltd etc.

Kotak Mahindra Bank, IIFL and KKR were the sponsors of the conference.