Morgan Stanley keen to start proprietary trading in India

Tags: News
Indian brokerage arm of global investment banker Morgan Stanley has sought RBI's approval to start proprietary trading under which it will be able to buy and sell securities on its own account.

The application of Morgan Stanley is pending with the Reserve Bank as there is no clarity on whether foreign direct investment is permitted in proprietary trading, sources told PTI.

RBI has sought views of the Finance Ministry on allowing the Indian arm of the US-based company to undertake proprietary trading.

Morgan Stanley was permitted by the Foreign Investment Promotion Board (FIPB) in 2007 to trade in securities, act as brokers, merchant bankers and undertake corporate advisory services.

The other activities permitted by the FIPB include primary dealership, underwriting, fixed income sales and portfolio management.

However, it was not clear from the permission granted whether Morgan Stanley could undertake proprietary trading, which envisages trading on own account. The FIPB permission was for broking, which is trading on behalf of clients.

In the absence of a clarification from the FIPB, Morgan Stanley has approached RBI for specific permission to trade on proprietary account. RBI, however, has asked Morgan Stanley to seek advice from the Finance Ministry.

The ministry on its part has asked Morgan Stanley to discuss the matter again with the central bank.

As there is no clarity on FDI in proprietary trading, sources said, RBI has written to the Department of Economic Affairs in the Finance Ministry seeking its views on the matter.

In its application Morgan Stanley wants to know whether it could undertake proprietary trading, which is permitted to all Sebi registered stock brokers in India, whether or not owned by an offshore company. PTI JD CSMorgan Stanley keen to start proprietary trading in India

New Delhi, Dec 25 (PTI) Indian brokerage arm of global investment banker Morgan Stanley has sought RBI's approval to start proprietary trading under which it will be able to buy and sell securities on its own account.

The application of Morgan Stanley is pending with the Reserve Bank as there is no clarity on whether foreign direct investment is permitted in proprietary trading, sources told PTI.

RBI has sought views of the Finance Ministry on allowing the Indian arm of the US-based company to undertake proprietary trading.

Morgan Stanley was permitted by the Foreign Investment Promotion Board (FIPB) in 2007 to trade in securities, act as brokers, merchant bankers and undertake corporate advisory services.

The other activities permitted by the FIPB include primary dealership, underwriting, fixed income sales and portfolio management.

However, it was not clear from the permission granted whether Morgan Stanley could undertake proprietary trading, which envisages trading on own account. The FIPB permission was for broking, which is trading on behalf of clients.

In the absence of a clarification from the FIPB, Morgan Stanley has approached RBI for specific permission to trade on proprietary account. RBI, however, has asked Morgan Stanley to seek advice from the Finance Ministry.

The ministry on its part has asked Morgan Stanley to discuss the matter again with the central bank.

As there is no clarity on FDI in proprietary trading, sources said, RBI has written to the Department of Economic Affairs in the Finance Ministry seeking its views on the matter.

In its application Morgan Stanley wants to know whether it could undertake proprietary trading, which is permitted to all Sebi registered stock brokers in India, whether or not owned by an offshore company.

Post new comment

E-mail ID will not be published
CAPTCHA
This question is for testing whether you are a human visitor and to prevent automated spam submissions.

EDITORIAL OF THE DAY

  • 49 per cent FDI in defence should pave the way for modernisation

    There is one industrial sector in India that has been kept out of the purview of the normal cycle of investment and production — defence.

FC NEWSLETTER

Stay informed on our latest news!

INTERVIEWS

GV Nageswara Rao

MD & CEO, IDBI Federal Life

Timothy Moe

Goldman Sachs

Chander Mohan Sethi

CMD, Reckitt Benckiser India

COLUMNIST

Arun Nigavekar

Necessary yet inadequate boost to education

The finance minister, in the very first minutes of his ...

Zehra Naqvi

We must overcome the fear of death

It is the biggest irony that the only thing that’s ...

Dharmendra Khandal

Jawai leopards and locals can coexist peacefully

At first glance, the Jawai landscape seems like a large ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture