Trouble brewing at PSE

PUNE, June 3: Even before the echelons at the Pune Stock Exchange could take a decision about joining the Inter-Connected Stock Exchange of ...

PUNE, June 3: Even before the echelons at the Pune Stock Exchange could take a decision about joining the Inter-Connected Stock Exchange of India, the contentious issue has snowballed into a major controversy with a sizeable number of members complaining about their non-entity status in the running of the exchange.

Forty-odd members of the PSE have sought a reply from the Executive Director about reversing the decision of majority of members to shift to earlier premises of the exchange at Shivleela Chambers, without consulting the members. They have also sought a reply on the decision of the Council of Management about joining the Inter-Connected Stock Exchange of India.

A letter to this effect written by PSE member Pran Mehra, bearing signatures of 39 other members has been submitted to the executive director, president and members of council of management of PSE on May 25. While seeking a reply, Mehra has also mentioned that he would convene an extraordinary general meeting with support of other members, if he does not receive a reply within a fortnight.

The controversy arose when a circular was issued to the members recently, asking their opinion on joining the Inter-Connected Stock Exchange of India.The members have also questioned the decision of executive director to let out a part of PSE8217;s present premises at Deccan Gymkhana to the Registrar of Companies without consulting the members. 8220;If this attitude is going to prevail there is no sense in sending these circulars and asking members their opinion,8221; the members said in the letter, adding that the president of the exchange has not discussed with the members that they have to pay for the inter-connected stock exchange.

The members have strongly supported the idea to join the inter-connected stock exchange, labelling it as their only hope of survival. However, they have also expressed doubts about the likelihood of PSE finally joining the inter-connected stock exchange, taking into account that the issue may face opposition from the members who are already members of National Stock Exchange NSE or having BOLT Bombay On Line Trading terminals.

Speaking to The Indian Express one of the members said, 8220;Since most big and influential brokers have BOLT facility or are members of NSE, they would oppose the idea as it would affect their business.8221;

At present the big brokers, about 25 in number out of the total 180 registered brokers at the PSE, speculate on only three scrips traded at the PSE and have a monopoly over the majority of operations. The linking of PSE with inter-connected stock exchange will facilitate the small brokers to carry out trading activity on a larger scale.

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The inter-connected stock exchange will facilitate the stock brokers at Pune to trade at other regional stock exchanges all over India which are linked to the main circuit. Untill now, 15 regional stock exchanges have already joined the network.

According to the rules of joining the network, individual members of the regional stock exchange cannot become the member of the inter-connected stock exchange directly. However, once the regional centres join the link, its members can avail the facility to trade at other member stock exchanges.