FM advises stockbrokers to corporatise business

Special Correspondent SEBI to revamp self-regulatory organisation norms Move will bring better standards of governance Brokers can have access to overseas markets NEW DELHI Finance Minister P. Chidambaram on Thursday advised stockbrokers to corporatise their business if they wanted to compete with global players in capital markets at home and abroad. Addressing the third annual conference of the Association of National Stock Exchanges Members of India here, Mr. Chidambaram said “Corporatisation brings better standards of governance, brings better transparency [and] increases the confidence level of customers. Therefore, I believe that stockbroking and stock market activities should also be corporatised.” Such a step, he said, would help brokers in accessing overseas markets and tapping funds of the Indian diaspora for domestic markets, apart from attracting professionals to family-controlled businesses. Alongside, the Bombay Stock Exchange and the National Stock Exchange should also consider assisting the small brokers to access overseas markets. On the issue of self-regulation of bourses, the Finance Minister noted that his Ministry had commissioned the World Bank for a study to throw up an effective SRO (self-regulatory organisation) model that would be suitable in the Indian context. In a bid to usher in better compliance of regulations, the SROs are expected to be the first level of a regulatory mechanism Mr. Chidambaram pointed out that the Securities and Exchange Board of India as the market regulator was engaged in the process of revamping the SRO norms so as to incentivise the formation of more SROs. It was also in dialogue with various capital market organisations to make the SRO stipulations more “market-friendly,” he said. At present, the market regulator is examining different self-regulation models for intermediaries and would be promoting SROs through the creation of an enabling law and new regulations. As a reassurance to stockbrokers, Mr. Chidambaram said the Government attached the “highest importance to capital market” and listed the steps taken during the last ten months to broaden the market