BSE broker dues brought down

They said systems failure coupled with problems created on account of reshuffling of staff have been attributed as the main reason for the current problems. “We have a comprehensive insurance cover of Rs 1000 crore, which will help us to take care of any problems created on account of the shares being misplaced,” stated RC Mathur, executive director, BSE.

“Indeclaring the payout on June 22 we have confirmed to the by-law 316 of the exchange,” he explained. As per the by-law 316, asset is defined as cash, bank balance, bank guarantees, refundable contributions and marketable shares and securities. According to Mathur, when these asserts are more than the broker’s payment obligations than the broker cannot be declared a defaulter.

Explaining the exchange’s stand, Mathur further elaborated the actual position of 23 brokers which includes the securities deposited by these members which were adequately placed by the exchange to raise the funds and the value of the capital deposit available with the exchange.

According to exchange officials, some of these brokers who were not in a position to adequately fulfil their payment liabilities placed additional cover with the exchange by depositing acceptable shares and securities of adequate amount including the haircut or the upper limit.

“In declaring payout on the June 22 the exchange was fully covered with thefunds or shares and securities and in fact there were surplus values available,” explained Mathur. As per the figures, while the total market liabilities of the 18 brokers are to the tune of Rs 4 crore, the assets available with the exchange in the form of securities and additional capital are more than 10 crore. Securities placed by the brokers namely Lalkar Securities, RR Mohta, SN Nangalia, SN Tara and Mefcom were placed by the exchange to raise funds to the tune of Rs 53.40 lacs, Rs 3.56 crore, Rs 5 crore, Rs 1.18 croe and Rs 1.14 crore respectively. Bringing to light the need for tighter capital adequacy norms, Anand Rathi, BSE director, made a case for Sebi to look into the matter.

Meanwhile, a mismatch of Rs 3 crore has been detected in the value of shares which are due to be delivered to the Stock Holding Corporation of India (SHCIL) by BoI Shareholding. SHCIL has told the exchange that the clearing house’s dues to the custodian are about Rs 7-8 crore as against the figure collated by BSE which hasapparently informed the custodian that the value of shares to be delivered to SHCIL now stands at Rs 4-5 crore. A custodial source said that the findings that a large number of shares were not delivered to institutional investors, is strange considering that the official stand of the exchange with regard to all the recent settlements, has been that the pay-out has been successfully concluded.