HLCCFM
Also written High Level Coordination Committee on Financial Markets
The informal body that coordinated SEBI, RBI, the Department of Economic Affairs and the Ministry of Corporate Affairs before the Financial Stability and Development Council replaced it in 2010.
In plain language
India's securities market has more than one regulator. SEBI, the RBI, the Department of Economic Affairs and the Ministry of Corporate Affairs all share pieces of the job.
Before 2010, one body tried to keep these regulators talking to each other: the High Level Coordination Committee on Financial Markets, or HLCCFM. It had no statutory powers of its own. Its role was informal coordination, not rule-making.
In 2010, a stronger body took over that coordinating role: the Financial Stability and Development Council (FSDC).
How it works
The workbook places HLCCFM in Chapter 1, section 1.4, in a short account of India's regulatory structure. HLCCFM's secretariat sat inside the Ministry of Finance, specifically its Capital Market Division in the Department of Economic Affairs.
Its function was to facilitate coordination among SEBI, RBI, the Department of Economic Affairs and the Ministry of Corporate Affairs, but only informally — the workbook is explicit on this word. It had no power to bind any of the regulators to a decision.
In 2010, the Financial Stability and Development Council (FSDC) replaced HLCCFM. The FSDC has a wider remit than coordination alone: it also monitors macro-prudential regulation and financial stability across the whole financial system, not just the securities market.
A worked example
Before 2010, suppose SEBI wanted to tighten margin rules for trading in government securities, an area where RBI also had a direct interest as the regulator of the G-Sec market. HLCCFM was the forum where SEBI and RBI officials could discuss the overlap informally, at the Ministry of Finance's Capital Market Division, before either regulator issued its own circular.
After 2010, that same conversation happens instead within the FSDC, which brings SEBI, RBI, IRDAI and PFRDA together under one council with a defined mandate for financial stability, rather than the earlier informal committee with none.
Why NISM asks about it
Chapter 1, section 1.4 (Regulators), in the single paragraph explaining who replaced whom in India's regulatory coordination structure. This is a compact, high-yield fact for a one-line recall question: expect the paper to ask what replaced HLCCFM, in what year, and where its secretariat sat.
Common exam traps
- HLCCFM was replaced by the FSDC in 2010 — candidates sometimes reverse the direction, naming HLCCFM as the current body.
- HLCCFM coordinated informally; it did not regulate. It issued no rules and had no enforcement power of its own.
- Its secretariat sat in the Ministry of Finance, not at SEBI or RBI — a detail the workbook states explicitly and one that is easy to guess wrong.
Check yourself
1.Under the securities laws, rules are framed by ________ and regulations by ________, and both are administered by ________.
- a)SEBI; the government; the government
- b)The government; SEBI; SEBI
- c)SEBI; SEBI; the Securities Appellate Tribunal
- d)The government; the government; SEBI
Show the answer
Answer: (b) The government; SEBI; SEBI
The rules under the securities laws are framed by the government and regulations by SEBI, and all these are administered by SEBI.
Three facts in one sentence — and in everyday speech "rules" and "regulations" are used interchangeably, which is precisely why this is examinable.
Government makes rules. SEBI makes regulations. SEBI administers both.
The wider division of authority: the SEBI Act and the Depositories Act are mostly administered by SEBI, while most of the powers under the SCRA are exercisable by DEA while a few others by SEBI, with the DEA's powers also concurrently exercised by SEBI.
RBI's concurrent powers cover: the contracts for sale and purchase of securities, gold related securities, money market securities and securities derived from these securities and ready forward contracts in debt securities.
And SEBI reaches into company law for a defined purpose: the powers under the Companies Act relating to issue and transfer of securities and non-payment of dividend are administered by SEBI in case of listed public companies and public companies proposing to get their securities listed.
Note the limitation — listed companies, and those proposing to list. For others, those powers stay with the MCA.
Below all of this sits self-regulation: the SROs ensure compliance with their own rules as well as with the rules relevant for them under the securities laws.
And above it, coordination: in 2010, the Financial Stability and Development Council (FSDC) replaced the High Level Coordination Committee on Financial Markets (HLCCFM).
2.The Financial Stability and Development Council (FSDC) replaced which body, and in which year?
- a)The Securities Appellate Tribunal, in 2005
- b)The High Level Coordination Committee on Financial Markets (HLCCFM), in 2010
- c)The Department of Economic Affairs, in 2012
- d)The Ministry of Corporate Affairs, in 2010
Show the answer
Answer: (b) The High Level Coordination Committee on Financial Markets (HLCCFM), in 2010
In 2010, the Financial Stability and Development Council (FSDC) replaced the High Level Coordination Committee on Financial Markets (HLCCFM) which was earlier facilitating regulatory coordination among the above agencies, though informally.
Note the word "informally" — the HLCCFM had no statutory footing, which is part of why it was replaced.
Where it sat: the secretariat of HLCCFM was in Ministry of Finance (Capital Market Division, Department of Economic Affairs).
The agencies it coordinated: the responsibility for regulating the securities market is shared by the Securities and Exchange Board of India (SEBI), the Reserve Bank of India (RBI), the Department of Economic Affairs (DEA) of the Ministry of Finance, Ministry of Corporate Affairs (MCA).
Four regulators for one market — which is exactly why a coordination mechanism is needed.
Option A confuses coordination with adjudication. The Securities Appellate Tribunal has a different function entirely: the orders of SEBI under the securities laws are appealable before a Securities Appellate Tribunal.
Options C and D name bodies that were not replaced — the DEA and the MCA both continue as securities market regulators in their own right.
How the work divides between them: most of the powers under the SCRA are exercisable by DEA while a few others by SEBI · the SEBI Act and the Depositories Act are mostly administered by SEBI · and the powers under the Companies Act relating to issue and transfer of securities and non-payment of dividend are administered by SEBI in case of listed public companies and public companies proposing to get their securities listed.
Where this is taught
Free preparation for NISM Series VIRelated terms
- Certificate of registrationThe SEBI registration without which a depository cannot deal in securities, no entity may act as a DP, and no FPI may invest. It is valid unless SEBI suspends or cancels it.
- FSDCThe Financial Stability and Development Council, set up in 2010 to replace the informal High Level Coordination Committee on Financial Markets, coordinating regulation among SEBI, RBI, DEA and MCA.