BSE,NSE clearing ops to be merged

Sebi currently allows traders to settle and clear only on the exchange on which the transaction takes place.

“As of now,aggregated clearing is not possible because the clearing corporations of both exchanges are separate and they are not integrated,” executive director JN Gupta said.

“However,Sebi is looking into the possibility of interoperability between the clearing corporations. But it will not be very soon. It will take two to three years.”

The move would be especially beneficial to high frequency trading (HFT),which,although in its early stages,is expected to grow in India. Banks and hedge funds undertake the quicker algorithmic trade to make markets,earning thin profits from inefficiencies among various marketplaces.

HFTs have been criticised for making markets more volatile,a fact borne out by the US regulators partly blaming HFTs for the flash crash in May 2010 when shares there plunged 600 points in just a few minutes before bouncing back.

Meanwhile,overseas investors pumped nearly R17,000 crore into the Indian market,including stocks and bonds,in the first six months of 2011 and analysts feel the positive trend will continue in the coming months as well.

Between January and June this year,foreign institutional investors (FIIs) purchased equities and debt securities worth a gross amount of R46,9511 crore.