Stressing self-regulation for capital markets, Finance Minister P Chidambaram on Thursday said the government has commissioned a World Bank study to suggest an effective model for India in this regard.
Speaking at the 3rd annual conference of the Association of National Stock Exchanges Members of India, the finance minister also asked the stock brokers to corporatise their business to compete successfully in the global platform.
"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 the conference in New Delhi.
SROs are expected to be the first level of regulators, which 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.
Commenting on the business of brokers, he said, "Corporatisation brings better standards of governance, brings better transparency, increases the confidence level of customers. Therefore, I believe that stock broking and stock market activities should also be corporatised."
It will help brokers to access overseas markets and tap the funds of Indian Diaspora for domestic markets apart from attracting professionals to the "family- controlled business," he said.
