Journal Press India^®

Author Details ( * ) denotes Corresponding author

There has been an on-going debate over the Market Infrastructure Institutions (MIIs): their number and growth, as well as, the need for regulation and governance of MIIs, including stock exchanges (Lee (2010)). This paper raises a set of questions: (i) What is the economic understanding of governance of MIIs?, (ii) What is its role in developing competitive financial markets?, and (iii) What are the implications for investors? The Bimal Jalan Committee (2010) for the reform of MIIs fails to recognise the real issues in bringing about stock market reforms. It ignores the need for competition and dynamics amongst the MIIs. Apart from such a need, there is the larger interest that stock markets should serve: that of investors. A necessary condition for ‘competitive investorism’ to happen is the establishment of new Market Infrastructure Institutions, especially stock exchanges that are for-profit and are cross-listed. Cross-listing brings market discipline and may go beyond regulatory control by doing well for stock markets and investors alike. It makes stock markets competitive and efficient and passes on these benefits to the investors.

Keywords

Competitive Investorism, Market Infrastructure Institutions, Bimal Jalan and Kania Committee

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