Delhi bourse set to start mock trading next week

The Delhi Stock Exchange (DSE) plans to start mock trading from Monday, making it the first regional stock exchange to become active after the Securities and Exchange Board of India (Sebi) announced demutualisation norms for stock exchanges. The exchange also planned to launch futures and options trading after six months, said a source.

Sources said HDFC Bank and Canara Bank would act as clearing houses. DSE had completed the demutualisation process in 2007 by selling 55 per cent stake to investors.

DSE was planning to resume trading in November 2009. But, in October 2009, Sebi told regional stock exchanges to seek its approval before starting trading in case they had not been functioning for over six months. Sebi also said that it would inspect the exchange’s platform and risk management systems.

A total of 2,800 scrips are listed on DSE, out of which 1,700 are exclusive to it. It is aiming to list 5,000 scrips that are at present inactive on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE).

As part of its revival strategy, DSE launched a deposit-based membership scheme in 2009 which received an overwhelming response from brokers. It has received 150 membership applications for deposit-based trading. It also launched an amnesty scheme in March 2009 to revive inactive scrips. It is also said to be considering a platform for SMEs.

Under the amnesty scheme, the exchange waived off the 25 per cent listing fees outstanding for five years and 40 per cent of the dues for a period of more than five years. The revival of scrips will enable companies to trade on Delhi Online Trading System (DOTS), which has been developed in association with Financial Technologies (India) Ltd (FTIL).

Some key investors in DSE include Wilmette Holdings, New Vernon Private Equity and Passport Global Master Fund, accounting for about 21 per cent stake. Bennett, Coleman & Company Ltd, TV18 and NDTV also own a part of the exchange.

During 2008-09, DSE’s gross income was Rs 10.96 crore as against Rs 11.02 crore in the previous year. Its profit after tax stood at Rs 4.36 crore as against Rs 5.38 crore in the previous year.

In a bid to attract trading members, the exchange has also reduced the networth criteria to Rs 13 lakh, a fraction of the Rs 1 crore that BSE requires and the Rs 3 crore that NSE asks for. Of this, Rs 12 lakh is in the form of refundable deposits and is allowed to be adjusted against margin requirements.