Soon after Indian finance minister Jaswant Singh announced measures to boost the equity market in his first budget, the Indian securities market regulator put out a code of conduct for market intermediaries that is unsettling foreign investors. Many believe the code for foreigners contains a veiled warning to stick to Indian rules or face the consequences just as one of them - Credit Suisse First Boston - did last year.
CSFB faced the ignominy of having an application to renew its registration as an institutional investor in India turned down by the Securities Exchange Board of India. Sebi said CSFB was "not fit and proper" because its broking affiliate is "inextricably linked" to a suspended Mumbai stockbroker.
The broker, Ketan Parikh, faces charges of rigging stock prices. This month CSFB's two-year suspension on stockbroking activity will end, and it can re-apply for registration. But sources at its almost-deserted Mumbai office say it is unlikely to restart business soon.
CSFB advised the Indian government on one of the biggest privatization sales last year - telecoms company Videsh Sanchar Nigam - but is now out in the cold. Some bankers blame the firm's weak rules on compliance, others point out CSFB got caught doing what others got away with.