Cap move seeks to balance freedom and responsibility

���Institutions that have a gatekeeping role and enjoy some sort of monopoly cannot have the same incentive structure as in a purely commercial enterprise, whose primary motive is maximising profits.

In a country with a high degree of financial illiteracy, these gatekeepers have to exercise their freedom to incentivise performance with responsibility. Their failure can have a great impact on the system than that of a manufacturing company,��� added the official.

If the government decides to accept the proposals, the pay structure of executives in rating agencies such as Crisil, Icra and Fitch India, stock exchanges like BSE and NSE and commodity exchange MCX will get impacted.

Also, depositories like NSDL and CDSL and clearing corporations like CCIL, which ensure that executed trades are settled efficiently, will face restrictions on incentives.