BSE to set tough norms for board members

This follows the sacking of the former president J C Parekh and resignation of executive director R C Mathur over the price rigging and payment crisis last year. SEBI which investigated the price rigging had come down heavily on the BSE for various malpractices involving theboard members, especially tampering with the computer system after trading hours.

The exchange would endeavour to delink policy making and administrative functions of the exchange. Rathi, however, categorically denied the interference of the governing board in the day-to-day administrative decision making at the exchange in the past and also assured that a complete delinking would be in place in the near future. Besides the exchange has also decided to introduce a comprehensive online surveillance system by the end of April.

Rathi, who addressed reporters here on Tuesday, indicated the beginning of a new era of friendly co-operation with its arch rival National Stock Exchange. “The setting up of the NSE was an excellent thing to have happened. It has provided us a source of challenge and competition, and competition is always welcome as it ensures maximisation of investors interests.” Due to lack of co-operation between the two stock exchanges, major capital markets reforms initiatives like theintroduction of derivatives trading, uniform settlement and rolling settlements have been languishing for more than a year.

Rathi, who made presentation of `Mission-2000.. and beyond’ at his maiden press conference after being elected as president of the BSE, said the exchange would take a proactive approach with the SEBI and the government to protect small investors from errant companies. He said that BSE has always been a self-regulated organisation and chalked out a five point agenda to ensure that the exchange improves its status as an SRO and ensures investors interest.

According to its action plan, the BSE will work in the direction of expansion of BOLT in 500 cities by March 2000, setting up of its own VSATs network, setting up of clearing corporation and depository services through the BOLT network to enable lowest cost and highest reach for the investors.

The exchange has also planned to launch derivatives trading as soon as receiving regulatory clearances, he said.

“We would initiate a"market-making" concept which is workable and would be effective in providing liquidity and reducing bid-offer spread. We would also maintain our lowest transaction costs," he said.

The BSE has also announced setting up of a single-point dedicated interface for solving investors’ problems. The exchange has started preparing a list of errant companies which are not fulfilling the exchange requirements and allegedly harrassing investors. The exchange would like to take up the matter of such companies with the company affairs department. “We have done substantial work in resolving investor’s complaints against the members and issuers. We would further speed up this process,” Rathi said.

BSE to form defaulters category
Mumbai: The Bombay Stock Exchange Exchange (BSE) has decided to transfer defaulting companies to a separate category called `Z’ category to make the investor aware of the risk in dealing in such securities. The BSE has decided to categorise such companies rather than delist them asthe small investor would otherwise lose the option to liquidate his holding. Hundreds of companies listed on the BSE have not complied with listing norms by not releasing annual audited results, disappearing with public money and non-payment of listing fees. “Action will be initiated against about eight to ten such companies by the month-end for winding up so that the investors can recovery some money from these companies,” BSE president Anand Rathi said here on Tuesday.