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| Madras bourse seals trade access deal with NSE |
| BS Reporter / Chennai Nov 06, 2009, 00:34 IST |
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Such pacts needed for regional exchanges to survive, says Bhave.
The Madras Stock Exchange (MSE) is setting a target of 500 members by 2011, backed by the strategic tie-up it entered into with the National Stock Exchange (NSE) today.
According to the tie-up, the MSE members will be allowed to trade on the NSE platform, in cash and F&O segments, by issuing MSE contract notes.
The capital adequacy norms of the members will be placed by MSE, whereas the exposure and margining will be done in compliance with the rules of NSE.
For the first day, shares of 10 companies were allowed to trade on the NSE platform. Gradually, about half the companies listed in MSE will be allowed access to the trading platform of NSE, according to R K Pillai, executive director, MSE.
Speaking to reporters after the launch of the tie-up, S Venkateswaran, director, MSE, said the Madras Stock Exchange also plans to set up
its own trading platform within the next three years. “We would also make available more products for trading, including currency futures and interest trade futures. But we will be increasing the SME (small and medium enterprises’ participation in the bourse”, he added.
Speaking at the launch, C B Bhave, chairman of the Securities and Exchange Board of India (Sebi), said improvements in technology have disrupted the business model of regional stock exchanges and such strategic tie-ups are the way forward for the 20 RSEs in the country.
He also said the market regulator will be investigating the non-availability of refund for investors after public issues of companies.
“We should propagate a mechanism where an investor’s money is not taken out of his account till he is told how much shares will be allotted to him,” he said.
Running accounts that are kept between brokers and investors are also hurting the investors and Sebi will try to bring out solutions, he said.
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