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Journalism of Courage
MUMBAI, June 10: The governing board of the Bombay Stock Exchange (BSE) has decided that no exchange member will be allowed to extend personal guarantees to other exchanges. The move may threaten cross-membership between BSE and the National Stock Exchange (NSE).
Explaining the rationale behind the move, BSE president M G Damani said the move by NSE to ask its members for a personal guarantee (unlimited liability) in the form of an indemnity bond is perceived as a step which would actually jeopardise BSE’s safety and integrity in the long run.
Further, as per BSE’s byelaws which provide grounds for termination of members, no individual member or a partnership firm can engage in personal financial liabilities.About 150 BSE individual members are also members of the NSE directly or indirectly. The board’s decision has been based on complaints lodged by members who refuse to abide by NSE’s demands.
