In 2013, the chief business officer at the Bombay Stock Exchange needed to prepare a recommendation on whether to pursue liquidity enhancement schemes in the equity cash market. The Bombay Stock Exchange, the oldest stock exchange in Asia, had held a monopoly in India until 1994, when the National Stock Exchange was launched. When derivatives were introduced to the Indian stock exchanges in 2000, the Bombay Stock Exchange had been unprepared, and the National Stock Exchange soon captured the entire derivatives market. In 2011, the Securities and Exchange Board of India approved the introduction of the Liquidity Enhancement Incentive Programmes on illiquid securities in the derivatives segment. The Bombay Stock Exchange then introduced the incentives for various illiquid products in the derivatives segment, but lost profit as a result of the incentives it paid out. Had the Liquidity Enhancement Incentive Programmes improved liquidity in the derivatives segment? Was it worth sacrificing profit to gain liquidity and market share? The chief business officer needed to address the long-term benefits of liquidity enhancement schemes and the merits of introducing such schemes to the Bombay Stock Exchange’s equity cash market.
In 2013, the chief business officer at the Bombay Stock Exchange needed to prepare a recommendation on whether to pursue liquidity enhancement schemes in the equity cash market. The Bombay Stock Exchange, the oldest stock exchange in Asia, had held a monopoly in India until 1994, when the National Stock Exchange was launched. When derivatives were introduced to the Indian stock exchanges in 2000, the Bombay Stock Exchange had been unprepared, and the National Stock Exchange soon captured the entire derivatives market. In 2011, the Securities and Exchange Board of India approved the introduction of the Liquidity Enhancement Incentive Programmes on illiquid securities in the derivatives segment. The Bombay Stock Exchange then introduced the incentives for various illiquid products in the derivatives segment, but lost profit as a result of the incentives it paid out. Had the Liquidity Enhancement Incentive Programmes improved liquidity in the derivatives segment? Was it worth sacrificing profit to gain liquidity and market share? The chief business officer needed to address the long-term benefits of liquidity enhancement schemes and the merits of introducing such schemes to the Bombay Stock Exchange's equity cash market.
This note provides an overview of the Indian mutual fund industry and compares it with other financial markets globally. Also considered are the evolution of the mutual fund industry in India and the place of mutual funds in an Indian household's typical investment portfolio. The note covers various other aspects of India’s mutual fund industry, such as the size of the industry, its main products, the major players, recent changes to mutual fund regulations and taxation.
This note provides an overview of the Indian mutual fund industry and compares it with other financial markets globally. Also considered are the evolution of the mutual fund industry in India and the place of mutual funds in an Indian household's typical investment portfolio. The note covers various other aspects of India's mutual fund industry, such as the size of the industry, its main products, the major players, recent changes to mutual fund regulations and taxation.