MUMBAI, June 10: The Ministry of Finance (MoF) has convened an emergency meeting with Sebi chairman D R Mehta and executive director in charge of secondary markets, Pratip Kar, on Thursday to take stock of the situation.The meeting comes in the wake of massive sales by foreign institutional investors post-budget and the recent wild fluctuations in the market. Market sources said that the Sebi chairman is expected to inform the finance ministry about the feedback the regulator has received in its meetings with top FIIs including the head of Templeton's emerging markets, Mark Mobius, over the past two days.The BSE convened a meeting of its board on Wednesday to study the financial conditions and the outstanding positions of about seven brokers. It was however, decided that only four brokers are in trouble which if not resolved by Thursday morning, could lead to their suspension from trading. According to sources, two of these brokers are operating on NSE as well.The general feedback which Sebi hasreceived from FIIs, which are according to them has led to the fall, are the failure of the budget to address capital market concerns, the fall-out of the nuclear tests and the south-east-Asian crises are the main reasons for the flight of FIIs, which has seen close to Rs 500 crore worth of net sales since the budget.In addition to this, Sebi is also expected to inform the finance ministry about the safety of the market and the steps that have been taken to ensure this. The regulator had on Monday met the NSE and BSE top brass and had spoken to other smaller exchanges.It was felt that there was no current danger of widespread defaults in the market owing to stringent monitoring of exposure level by exchanges. However, imposition of special margins on short sales, was one of the points that came up for discussion and this was not ruled out at a later date. Sebi sources informed that the data that the regulator had collated from stock exchanges did not reveal huge short positions.
