DSE plan may dampen ISE

NEW DELHI, MAR 21: In a move which could cripple the Interconnected Stock Exchange ISE, the Delhi Stock Exchange DSE has decided to expand its operations beyond the capital by providing trading terminals in other major cities. As a first step in this direction, the DSE would sign a memorandum of understanding MoU with the Calcutta Stock Exchange CSE tomorrow to provide DSE trading terminals in Calcutta.

As per the Securities and Exchange Board of India SEBI regulations, a stock exchange cannot set up trading terminals in another city where an exchange already exists without signing a MoU. quot;The DSE will sign its first MoU with the Calcutta Stock Exchange on Monday and follow it up with Ludhiana and Kanpur to generate business,quot; DSE president Ashok Aggarwal told PTI. This follows the DSE plan to drop the idea to merge the regional stock exchanges in the north to counter the Bombay Stock Exchange BSE and the National Stock Exchange NSE. Aggarwal said the merger proposal was dropped since therewas no value addition to the exchange. Interestingly, CSE, Ludhiana and Kanpur are members of ISE, which has already started mock trading from February 26.

DSE already has 33 terminals in different parts of the country, particularly in northern region, where no stock exchange exists.

Aggarwal said the main idea behind expanding operations was to improve liquidity and turnover. The exchange has set a target of installing at least 200 terminals outside Delhi by the end of the year. quot;We are also inviting large broking firms dealing on other major bourses to become members of the DSE,quot; he said. DSE has already finalised plans to appoint market specialists, better known as jobbers, who would provide two-way quotes on scrips allotted to him on a maximum prescribed spread. He said the exchange has already selected about 180 scrips and jobbers, who would be DSE brokers and would be given two scrips each to deal in. quot;This would generate more liquidity and business for the exchange and reactivate less tradedb-group shares,quot; he said.

Aggarwal said the specialists8217; performance would be reviewed from time to time by a committee appointed by the board.