BSE plans risk management system

MUMBAI, June 17: The Bombay Stock Exchange BSE has decided to implement a risk management system8217; in order to provide safety to the increase in the volume of business and check the entry of fake shares.

The BSE is now expanding its trading facility to other cities. While this will increase volume of business, it will also increase risk. 8220;One such risk is in respect of fake/forged/stolen shares. It is therefore essential to provide safeguard by way of risk management while expanding the reach of exchange to other cities,8221; said a BSE official. In an internal letter to the members, R C Mathur, executive director, has stated that the broker-members should obtain xerox copies of few shares and transfer deeds from the shares/transfer deeds delivered to them by the sub-brokers/clients for onward delivery to the clearing house. Brokers should send these to the companies or to registrar concerned to confirm the genuineness of the shares/as well as to identify the signature difference.

Besides, at least one share certificate and transfer deed be selected from receipt of shares of one scrip of more than Rs 2.5 lakh from a single client/sub-broker, random selection from the deliveries of more than Rs 2.5 lakh or part thereof from every broker/client in every settlement and in respect of those companies where fake shares are reported to be more in circulation, the quantum of verification should be twice that of normal checking. In respect of shares received from the clearing house, the delivery of more than Rs 5 lakh in a scrip at least on share certificate and transfer deed for each Rs 5 lakh or part thereof, and in respect of other companies, one share certificate and transfer deed for delivery of Rs 5 lakh or part thereof.