Badla "leak" pulls down Sensex

Mehta denied allegations about the “leakage”. “The meeting began at 9.45 am and ended up at 4.30 pm. There is no leakage from the SEBI office. I can assure you on this. If you give me definite information, I will inquire into it,” Mehta told newspersons after the board meeting.

However, several brokers confirmed that rumours about postponement of badla started pouring in from 2.15 pm onwards.

As a result, the sensex crashed by around 110 points from the day’s high of 4,504 to touch a low of 4,393. The index finally settled at 4,425.

Mehta said the `badla’ issue would now be taken up in their next board meeting to be held in Chennai on September 5. “Due to a heavy agenda in today’s meeting, we could not discuss this matter at all,” Mehta said. When asked whether there was any difference of opinion among the board members on `badla’ issue today, Mehta said due to other urgent pressing matters, the board did not discuss this issue. BSE brokers when contacted said they are extremely disappointed over SEBI’s inaction and the matter will now be hanging for yet another month.

SEBI had set up two committees — the Varma committee and the G S Patel Committee — to review the revised carry-forward system which had recommended drastic changes in the existing badla format. The Varma report, submitted in July has not been taken up by SEBI for consideration in its board meeting since then.

The Varma committee has eliminated some of the recommendations earlier suggested by the G S Patel committee. Among the ones suggested for elimination are: A limit of 90 days for carryforward of transactions, settlement only by delivery after the 75th day, and a limit of Rs 10 crore on financier funding. The Varma committee had also called for the elimination of the overall limits and sub-limits on purchases and sales, and scripwise limits on carry-forward transactions.