Sebi raising bar for brokers, AMCs
Sebi raising bar for brokers, AMCs
0 Comments | DNA : Daily News & Analysis; Mumbai, May 14, 2010 | by Mampatta, Sachin P
A committee instituted by the Securities and Exchange Board of India (Sebi) to review the eligibility norms of various market intermediaries has recommended an increase in networth for a number of them including asset management companies (AMCs), brokers and merchant bankers.
Comments and suggestions from the public on the committee’s recommendations have been invited till June 14.
According to the panel’s report, the requirement for AMCs should be increased from Rs 10 crore earlier to Rs 50 crore, in order to build up the minimum infrastructure required to service the industry as well as signal the company’s commitment to the business.
The increase should be gradual, suggested the report. It could go up to Rs 20 crore in one year and move to Rs 50 crore in three years.
The higher networth also keeps in mind the possible growth in the industry since it is currently facing an issue of underpenetration.
A higher networth would also help bear the company’s initial losses and provide an adequate cushion for growth requirements noted the committee
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