Govt seeks World Bank help for self regulation of mkts

Asking the brokers community to corporatise, Finance Minister P Chidambaram today said the government has approached the World Bank for an appropriate self-regulation model for the capital markets.

"The Ministry of Finance has commissioned a study to the World Bank to suggest an effective SRO (Self-Regulatory Organisation) model in the Indian context," he said at a conference on the capital markets here.

SROs are expected to be the first level of regulators, who can help in better compliance of norms.

Chidambaram said the market watchdog Sebi was in the process of recasting the SRO regulations in order to incentivise the formation of more SROs.

The market regulator is also in dialogue with various capital market organisations to make the SRO regulations "market-friendly," he said.

Business Standard reporter adds that the Association of National Exchanges Members of India (ANMI) is likely to be the first self-regulating organisation for investment advisors in the capital market. "I hope ANMI will become the first self-regulating organisation," Chidambaram said.

Sebi is considering various models of self regulation for intermediaries and would be promoting "SROs by way of creating new regulations and an enabling law".

Emphasising the need to consolidate the broking business, the finance minister asked the broker community to corporatise and become "public limited companies" to compete with the global players.

While enumerating the steps taken by the government to broaden the capital market in the past 10 months, he said the government attached "highest importance to capital market."

"We will continue to strengthen, deepen and broaden capital market," he said.