The Hindu : Business : Chidambaram warns erring stock brokers

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Saturday, Apr 09, 2005

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Business

Chidambaram warns erring stock brokers

By Our Special Correspondent

The Union Finance minister, P. Chidambaram, speaking with the Chairman of Securities and Exchange Board of India, M. Damodaran, at a convention in Mumbai on Friday. — AP

MUMBAI, APRIL 8. The Union Finance Minister, P. Chidambaram, today expressed his worries about the misuse of regional stock exchanges and sub-brokers by the debarred market participants and gave an assurance that that "stringent action would be taken against these unscrupulous elements.''

"With the help of Bombay Stock Exchange and National Stock Exchange, the Securities and Exchange Board of India (SEBI) should come out with decision even if it meant shutting down of some regional exchanges. In any case, misplaced sympathy will not be allowed to play any role for bad money drives out good money. We will do everything possible to professionalise the working of exchanges and see that the brokers follow all laws and live up to the highest standards of ethics,'' said Mr. Chidambaram.

He was speaking at the inaugural of the convention of the Association of NSE Members of India (ANMI) on "the securities market vision for development and regulations national and international perspectives,'' here.

Further, Mr. Chidambaram also appealed to the community of stockbrokers to corporatise their business at the earliest and warned the brokers to be prepared for next generation reforms. Traditionally broking was a "stand alone'' business where individual person's skills were much counted. However, investors are more comfortable with corporations because of their efficiency and factors of continuity. "All of you must corporatise and there is no space for any superman in the capital market,'' he added.

Speaking about Mumbai as the world's regional financial centre, Mr. Chidambaram reiterated that the city had all the potential including proper geography and energetic people to become the financial centre. A committee would be set up soon to work out the modalities, he added.

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