MUMBAI, February 2: The Bombay Stock Exchange has decided to scrap the system of putting scrips on spot delivery basis at the time of rights issues. The decision comes in the wake of the SEBI directive dated January 21, 1998 and will be implemented with immediate effect.However, in a comminque to the members, the executive director of the exchange has clearly specified that those scrips which are presently under spot delivery on account of its rights issue will be traded in this category till its rights issue is closed.The governing board of the exchange in its meeting held on July 21, 1997 had decided to do away with the same, given the fact that the utility of the system was outlived, and had accordingly forwarded the issue to the SEBI. "In view of the weekly settlement and other surveillance measures like ad-hoc margins and special margins, the practice of putting scrips on spot delivery basis is not justified," commented a BSE official.In a move to curb price manipulation of stocks before or atthe time of the rights issue, the exchange's governing board at its meeting held on April 3, 1995 had decided that when the listed companies come out with further rights or public issue then the trading in the equity of such companies should be shifted on temporary basis to the spot delivery category at the relevant time."Accordingly, till date the practice of segregating such stocks irrespective of which group they belong and transferring the same to the spot delivery category at the time of the ongoing rights issue has been followed by all the exchanges," explained a BSE director.
