BSE clearing house outstanding brought down to Rs 9 crore

Mumbai, July 3: The total outstanding position of BoI Shareholding, the clearing house of the Bombay Stock Exchange (BSE), stood at a whoppi...

Mumbai, July 3: The total outstanding position of BoI Shareholding, the clearing house of the Bombay Stock Exchange (BSE), stood at a whopping Rs 113 crore for the settlement ended June 12. This has now been brought down to a total liability of Rs 9 crore carried forward from the settlement ended June 19.

At a press conference held here today, exchange officials and PF Patel, the managing director of the clearing house, clarified that although the situation was grim some time back, a bulk of the reconciliation has been successfully completed. The balance is likely to be settled by the weekend.

A systems failure coupled with problems created on account of reshuffling of staff has been attributed as the main reason for the current problems.

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"We have a comprehensive insurance cover of Rs 1,000 crore which will help us take care of any problems created on account of the shares being misplaced," stated BSE executive director RC Mathur.

"In declaring the payout on June 22 we have confirmed to the bye-law316 of the exchange," he explained.

According to bye-law 316, an asset is defined as cash, bank balance, bank guarantee, refundable contributions and marketable shares and securities. According to Mathur, when these assets are more than the broker’s payment obligations then the broker cannot be declared a defaulter.

Explaining the exchange’s stand, Mathur further elaborated the actual positions of the 23 brokers which include the securities deposited by them which were adequately placed by the exchange to raise the funds and the value of the capital deposits available with the exchange.

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

"In declaring a payout on June 22 the exchange was fully covered with the funds or shares and securities and, in fact, there were surplusvalues available," explained Mathur in the light of the confidential figures released to the media. As per the figures, while the total market liabilities of the 18 brokers was to the tune of Rs 4 crore, the assets available with the exchange in the form of securities and additional capital is 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 lakh, Rs 3.56 crore, Rs 5 crore, Rs 1.18 crore and Rs 1.14 crore respectively.

Bringing to light the need for tighter capital-adequacy norms, Bombay Stock Exchange director Anand Rathi said Sebi should look into the matter.

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