| A top source in a rating agency said it has set up a team to prepare a model that would be sent to the market regulator. The model, once completed, would be an indicator of the credibility of a stock broker, he added. |
| However, an indicative timeframe by which the rating might be introduced and whether all the brokers would be brought under the purview of the rating system in one go was not known. |
| Business Standard has sent a questionnaire to the Sebi chairman which was forwarded to the office of T M Nagarajan, a whole time director. Nagarajan was not available. |
| The idea of introducing mandatory rating for broking houses was mooted a long time ago when D R Mehta was the Sebi chairman. It was given a quite burial on the plea that the capital market was not ready to take this kind of an indicator. |
| A few months ago, one of the rating agencies had approached the stock broking companies on its own but found few takers. However, this time the market regulator was keen on introducing the rating. |
| The stock broking community applauded Sebi's initiative on the ground that the rating would guide investors, especially retail ones, as to whom they should deal with. In addition, it would help big ticket clients, including financial institutions, to choose their picks. |
| "It is for sure that not many brokerages would get favourable ratings once the system is introduced. However, it will help investors choose their picks from the lot. The process would ultimately act as a divide between good and bad stock broking companies," a former Calcutta Stock Exchange president and prominent stock broker said. |
| The rating agencies said the proposed exercise would be a daunting task given the shady image of a section of brokers. "The issue is associated with millions of investors. Any deviation in the system "" if a highly rated broker flops "" would damage the credibility of the rating house," said a top source in one of the rating agencies. |
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