Rolling settlement for demat

With the availability of the stock-lending scheme, Mehta said it is now possible to introduce rolling settlement in the demat segment of stock exchanges. He, however, conceded that in the initial stages there could be teething problems like lack of liquidity and low trading volumes.

SEBI sources later confirmed that trading in depository segment would pick up gradually and cited the example of the US market where only 80 per cent dematerialisation had been achieved till date. "Over a period of time, the paper-based market would shrink with a proportionate rise in paperless trading," a senior SEBI director said.

He added that settlement of trades through the depository would be made compulsory in a phased manner by addition of more scrips. At present, the institutions account for nearly 60 per cent of the delivery-based volumes on the major bourses, he pointed out. "A total transfer of their trading to the demat segment would be achieved gradually and we should be happy if we can have 50 per cent of their volumes by the end of the current year," he said. Among other decisions taken by the SEBI board are amendments to guidelines relating to mutual funds, depositories and merchant bankers. Under the mutual fund regulations, asset management companies have now been allowed time up to two years from December 9.

Badla trades on CSE soon

The Calcutta Stock Exchange (CSE) would soon get in-principle approvals from the SEBI to introduce modified carry-forward trading and setting up of trade guarantee fund (TGF). Stating this at a press conference here today, SEBI chairman D R Mehta said this would help the exchange to become more investor-friendly and the TGF, specifically, would protect the investors from incurring huge losses in case of bad deliveries.

SEBI chairman hoped that the exchange, after getting the clearances which were expected to come within a week’s time, would be able to implement them within three to four weeks. The CSE management would have a meeting with the SEBI executive director, gahrotra, and would discuss the lapses.