Rolling settlement mooted

Foreign Institutional Investors (FIIs), foreign brokers and custodians noted that the monthly trading volume in the optional rolling settlement window now available at the stock exchanges was only around Rs two-three crore, a SEBI statement said.

This indicated that institutional and other investors were not availing of the facility, the statement said. The participants were of the view that rolling settlement would have implications on the liquidity of the market and hence it was important to appropriately sequence its introduction, SEBI said.

While the common view was that rolling settlement should be introduced in phases, there weredifferences on how this phasing could be done, the statement said. One view was that phasing could be done scripwise while another was that it could be done investor-wise, it said.

The meeting focussed on several issues that would need to be addressed before rolling settlement could be introduced, the statement said. These included infrastructure of depositories, connectivity between the depository and the depository participant, banking issues related to electronic transfer of funds, implication of introduction of rolling settlement for smaller stock exchanges and infrastructure and software issues related to the stock exchanges and clearing houses.