SEARCH

Chidambaram wants brokers to corporatise

print   ·  
Mr P. Chidambaram, Union Finance Minister, with Mr S.K. Rustagi, President, ANMI, at a conference on the Securities Market - Vision for Development & Regulations - organised by the Association of NSE Members on Friday. - Shashi Ashiwal
Mr P. Chidambaram, Union Finance Minister, with Mr S.K. Rustagi, President, ANMI, at a conference on the Securities Market - Vision for Development & Regulations - organised by the Association of NSE Members on Friday. - Shashi Ashiwal

Our Bureau

Mumbai, April 8

THE Finance Minister, Mr P. Chidambaram, has urged brokers to prepare themselves for the next generation of reforms and corporatise their firms.

"Corporatisation of broking will shake the structure of the broking industry. Investors are more comfortable with corporatised and efficient services as they render better quality and continuity of services," he said.

To aid brokers in the process of corporatisation, the Finance Minister assured the brokers that if there are regulatory or tax hurdles in the process, he would be willing to look into these sympathetically. Mr Chidambaram also asked brokers to embrace technology, as this would help them keep pace with the best in the industry.

Inaugurating a convention on `Securities Market - Vision for Development and Regulations' organised by the Association of NSE Members, Mr Chidambaram said he was worried about the possible misuse of regional stock exchanges (RSEs).

"There are some disturbing news about some unscrupulous persons using RSEs and sub-brokers. In fact, a few people who may have been debarred from broking perhaps are operating from behind the scenes using sub-brokers and RSEs. If these suspicions are confirmed, stringent actions will have to be taken against these persons," he said.

SEBI has been asked to chalk out a plan for RSEs and sub-brokers, in consultation with the BSE and NSE.

"If this means that some regional stock exchanges will have to be shut down, so be it. If this means that sub brokers will have to work in restricted conditions, only as franchisees of brokers, then so be it," he said.

He said that unfortunately in India over the years, stock broking has acquired an unsavoury reputation. The unsavoury reputation of the broking community is only second to that of my own profession. I am not talking about law.

Mr Ravi Narain, Managing Director and CEO, NSE, raised the point of brokers moving to a system of segregation of their proprietary positions on stocks and client servicing needs. He said brokers need to analyse conflicts of interest between their books and their clients' needs, if any.

On oil prices, Mr Chidambaram said, will indeed put some pressure, but I think we have the capacity and the resilience to handle any shocks. On inflation, Mr Chidambaram said, the inflation figures released today would show a further decline from last week. "We are confident we can contain inflation, but we have to be alert." On concerns regarding the regulation of commodities market, he said, "These concerns have been conveyed to the Department of Company Affairs. I've asked SEBI to be in close touch with the FMC; they are in close touch. We will continue to keep a close watch."

On the strike against VAT, Mr Chidambaram said, "I'm happy that 21 States and now 2 more have implemented VAT. I'm confident that those States which have not been able to join VAT on April 1 will do so in the next few weeks. On interest rates, he said: "In the medium term, there is no pressure on interest rates to go up."

(This article was published in the Business Line print edition dated April 9, 2005)
XThese are links to The Hindu Business Line suggested by Outbrain, which may or may not be relevant to the other content on this page. You can read Outbrain's privacy and cookie policy here.

O
P
E
N

close

Recent Article in MARKETS

‘NRIs have started showing renewed interest in equities’

The rally in the stock markets has triggered hopes at many of the leading broking firms of better business volumes this fiscal. CJ Ge... »


Comments to: web.businessline@thehindu.co.in. Copyright © 2014, The Hindu Business Line.