SEBI ask SEs to prepare for Client ID by November

Mehta, who met Finance Minister Yashwant Sinha recently, said the regulator was ready with the systems but unless the stock exchanges prepare the back-office software, the Client ID could not be put in place. Although Mehta did not like to make any comments, the move for introducing Client ID is expected to be speeded up particularly with talks of takeover bids in the air including that by Calcutta-based jute baron Arun Bajoria for Bombay Dyeing.

The regulator had served notices to Bajoria, who claimed to have acquired 14 per cent stake in Nusli Wadia’s company and another six per cent in Thapar group’s flagship Ballarpur Industries Ltd (BILT), to reveal his position. Data obtained from depositories revealed Bajoria was holding a little over 11 per cent.

The Client IDs, expected to assist the regulator to track down transactions by investors and reveal their positions in an individual company, would be introduced by November end, Mehta said. Currently SEBI has a system of tracking brokers’transactions but there was no unique Client ID for investors. Some investors currently have more than one account numbers with their individual brokers.

Although SEBI was unperturbed by the southward movement the indices, the regulator is ensuring a better surveillance system. "Market surveillance has improved in the last few years and is constantly being reviewed by the regulator through a number of initiatives," SEBI senior executive director L K Singhvi said.

He said the initiatives – risk containment through introduction of rolling settlement, margining systems and regular market surveillances, have ensured that the market has been safe despite the recent fall in Sensex and Nifty.

"The market fall is not peculiar to India alone, it has been a global trend," he added. Mehta said 15 scrips out of the 163 sceips in the B1 segment would be tried for daily carry forward in BSE, continuous net settlement in NSE and automated lending borrowing mechanism (ALBM) in other bourses before introducing the rolling settlement.

The 15 companies having networth of over Rs 200 crore would be chosen as a thumb rule, he said. The SEBI chief also met officials of the Central Board of Direct Taxes (CBDT) for discussing tax related issues for venture capital funds.

Without disclosing details, Mehta said "we have placed our proposals, they are the authority to consider them." There were proposals that venture funds be exempted and instead investors gaining from the investments be taxed. Venture capital in the range $1.5-2 billion were in the waiting to enter the Indian equities markets.