Foreign SEs to allow Indian terminals

NEW DELHI, MAY 1: The stage is set for Indian stock exchanges to set up trading terminals overseas with foreign stock market regulators e...

NEW DELHI, MAY 1: The stage is set for Indian stock exchanges to set up trading terminals overseas with foreign stock market regulators expressing their willingness to allow trading in Indian markets from abroad.quot;Market regulators in various countries have informed that trading terminals can be set up abroad by Indian stock exchanges,quot; Sebi chairman D R Mehta told newsmen today.

Hong Kong and Gulf countries regulators has informed Sebi that no formal permission was required except a registration with them for setting up trading terminals by Indian stock exchanges he said after delivering the convocation address at Lal Bahadur Shastri Institute of Management here.While Canadian market regulators have stated that permission is required but Mehta said they have favoured setting up of terminals by Indian bourses. Finance minister Yashwant Sinha in the Union budget 1999-2000 had announced setting up trading terminals overseas by stock exchanges to tap the non-resident Indian investments in the Indianmarkets.

Mehta said the Department of Telecommunications has also agreed to provide necessary facilities for setting up these trading terminals. Meanwhile, the Sebi will constitute next week a committee on corporate governance, to be headed by noted industrialist Kumar Mangalam Birla, the Sebi chairman said.Talking to mediapersons after delivering the convocation address Mehta said, quot;we will issue the order to that effect in the coming week and the committee is likely to submit its report by first week of Augustquot;. The committee, which will be a ten to twelve-member body, would recommend to the regulator on implementation of corporate governance through change in listing norms. Besides, it will study the issue of insider trading and would suggest to Sebi ways to control it.

The terms of reference of the Birla committee will also include suggesting a change in accounting policies. On improving the stock exchange governance, Mehta said it is basically the responsibility of executive director of bourses.However, steps taken by the regulator in recent years, which led to resignations of stock exchanges8217; top officials, including the former BSE president, would go a long way in improving the governance at bourses. He said two more members have to join the panel before the work on the report commences. The report would touch on issues like consolidated accounts by corporates, insider trading and accounting standards modelled on global practices.

Mehta said the committee would frame the guidelines within the purview of listing agreements as through this route only Sebi can improve corporate governance. quot;Corporate governance is important for enhancing shareholders value,quot; he said, adding the corporate world will shrink in the absence of adequate level of corporate governance.

On the stock market day-to-day affairs, the chairman said Sebi has decided to segregate the functions with only the respective executive directors of exchanges being allowed to deal with surveillance aspects. quot;The office bearers will haveno say in the surveillance of stock market activities,quot; he said.

He said the recent controversy at the Bombay Stock Exchange emerged as quot;the exchange did not fully discharge the demarcation of powers.quot; Mehta said the multiplicity of regulatory agencies is also hampering Sebi to take stern action against erring companies.