FM wants Amfi, Ambi to be self-regulatory bodies

Finance Minister P Chidambaram today made a strong pitch for making the Association of Mutual Funds of India (Amfi) and the Association of Merchant Bankers of India (Ambi) self regulatory organisations (SROs) to ensure better regulation of the two key capital market intermediaries "" MFs and merchant banks.

Chidambaram said SROs have not developed in India despite attempts by Sebi to promote the concept. He was speaking at the inauguration of the Sebi's new headquarters in Mumbai on Friday.

Currently, SEs are the only functional SROs, regulating its broker members, while Amfi and Ambi normally work as industry-representative bodies.

"No SRO is currently registered with Sebi, and Amfi and Ambi hesitate to regulate its mes," the minister said.

On the steps needed to make the markets more healthy and attractive, he said the challenge was to persuade people to convert themselves from "savers to investors". This can happen when the "irrational fear (of the people) about capital markets is removed".

"Unless every saver is converted into an investor, we cannot achieve the higher level of economic growth," Chidambaram said.