The Hindu Business Line : ANMI renews bid for self-regulation

Kolkata, July 14 The Association of NSE Members of India (ANMI) has renewed its bid to become an SRO (self-regulated organisation) as part of a plan to partner with the market regulator in a more meaningful manner.

According to the ANMI president, Mr N.K. Agarwal, the association has pointed out that the SROs formed by market intermediaries in some countries play a more critical role. In Korea and Japan, for instance, stock dealers’ organisations have assumed greater responsibilities.

“Globally, the relationship between regulators and trade associations is very dynamic. This may be viewed in the backdrop of differences of opinion that often exist between the two sides,” he said, adding that the idea of forming an SRO has not really taken off in India.

ANMI’s application for SRO formation is pending with the regulator for the past two years.

The association, which on Saturday hosted a meet on the Indian capital market with the Institute of Chartered Accountants of India, has suggested free trade in securities and mutual recognition across jurisdictions. In other words, common listings (and amending the relevant regulations for this) are being considered important.

It also suggested that hedge funds should play a constructive role in order to develop the capital market further.

Hedge funds, which are often criticised for their perceived lack of transparency, are actually necessary because they can lead to serious innovations. However, there is a need for regulating these entities as well.

Banking facilities in India, the ANMI chief felt, are not sufficiently modern. In comparison, the country has advancedtechnologically and helped project the local market strongly before international investors.

Consolidation among market participants (within the securities broking industry) will emerge as a significant trend, ANMI has opined, adding that this will fuel growth.

“By 2010, the focus will firmly shift to a very crucial aspect: the Indian market vis-À-vis the rest of the world. There is a need to concentrate on areas in which we are lagging behind. Also, application of the best global practices will be important for us,” Mr Agarwal said.

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