Asia continues to lag other regions for integrating ESG principles with investing; better data and stronger regulatory requirements will help institutional investors, market observers say.
With NSDL, the memorandum of understanding, which was signed by both parties in Mumbai, will forge closer ties between the two organisations and comes less than a month after the New York-based DTCC signed a similar deal with the China Securities Depository and Clearing (SD&C).
Under the MOU, the DTCC and NSDL will establish a forum for senior management and staff of both organisations to meet regularly to exchange information on exchange market updates and business operating models. The relationship will also help the NSDL in better understanding the global trends in clearing and settlements.
More importantly, the MOU is timely for the Indian depository, which is currently feeling the heat of the demutalisation of the Bombay Stock Exchange (BSE), which owns 37% of NSDL and plans to accept bids from interested parties to set up a clearing corporation.
The same can also be said for DTCCÆs MOU with the CDSL. Like the NSDL, this Indian depository is also 37% owned by the BSE and is also on auction block. A similar information sharing and cooperation agreement has been forged between this depository and the DTCC.
The respective signings have also led some to believe that the DTCC could be interested in picking up a stake in one or both Indian depositories. Recent Indian regulations have stipulated that foreign players can now acquire up to 26% in stock market infrastructure companies like depositories, which are prompting these rumours. However, both Indian organisations have denied this was the driver behind the MOUs.
The relationship between the DTCC and the two depositories is expected to have benefits from the New York-based organisation. In particular, those close to the deal believe that the DTCC could leverage off the legacy software systems of the NSDL and CDSL.
The two signing come less than a month after the DTCC forged a deal with the SD&C. Under this MOU, both parties agreed on an exchange and cooperation arrangement which will include undertaking a cooperative effort on securities and clearing matters, promote cross-border investment and share operational information.
The appetite of institutional investors for green, social, and sustainable bonds that bring clear environmental and socio-economic benefits shows no sign of waning.
The German insurer has plans for the property sector in Australia and China too.
Global investors are advised to look selectively at Japanese equities as the country recovers from lockdown and continues to improve corporate governance.
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