Bse Waives Off Tws-Based Additional Capital Norm

The Bombay Stock Exchange (BSE) has decided to waive maintenance of additional capital with the exchange in relation to the number of trading workstations (TWS) held by them, with immediate effect.

Earlier, the maximum limit on the number of TWS per membership right had been removed and the members having more than 10 BOLT TWS were required to maintain additional capital with the exchange in relation to the number of TWS held by them.

Keeping in view the present market conditions and various risk management measures, such as reduction of gross exposure limit, introduction of compulsory rolling settlement for A group stocks/ scrips forming part of BSE-200 and value at risk-based margining system etc, taken by the Securities and Exchange Board of India (Sebi) and the exchange, it has now been decided that the requirement of maintaining the additional capital linked to the total number of BOLT TWS held by a member be temporarily kept in abeyance till further notice. In other words, the members would not be required to maintain additional capital related to the BOLT TWS held by them, as was stipulated hitherto, the BSE said.

The other conditions stipulated earlier for having additional TWS, would remain unchanged and the above will come into force with immediate effect, it said.

The decision is expected to help brokers reducing their cost of trading because with volumes dipping to new lows on one side due to erosion of investor confidence and the normal business expenditure continuing on the other side, it was increasingly becoming difficult for the brokers to survive. Many medium and small brokers are on the brink of closure.

Among other reasons, the higher additional capital requirement for more than 10 trader work stations had also played a role in the drastic closing down of terminals witnessed in past few months.