125 Dse Brokers Face Action Over Capital Adequacy Default

This represents nearly one third of the total members of the bourse. The figure has stunned even the DSE authorities who were earlier pegging the number at not more than 50 members.

According to DSE president Paramjeet Singh, the 125 members which include the four institutional members have not paid up their capital adequacy dues.

The capital adequacy limits at the bourse had been raised from Rs 3.5 lakh to Rs 7 lakh.About 50 per cent of these are inactive members, while the remaining trade quite actively at the bourse, said Singh.

However, when asked what action the exchange authorities proposed to take in the matter, Singh said that the authorities have decided to give another two days to these members to pay up their dues.

The further course of action will be decided in consultation with other senior officials of the exchange. We want to give one last chance to the members. Many of them have paid part of the dues so we feel they should be given some more time to pay up the remainder of the dues, said Singh.Incidentally, the first deadline was June 30, and when this was not met by a large number of brokers the DSE board decided to extend the deadline to September 30.

According to sources, however, the authorities are in a bind as this is the first time that the DSE authorities are faced with taking action against such a significant number of its broker members.

At the same time, the bourse has little choice with the Securities & Exchange Board of India (Sebi) insisting that exchanges take firm action against defaulters.The problem has however come in the matter of taking action against inactive members which account for nearly 50 per cent of the defaulters.

DSE authorities feel that while it is possible to threaten active members about paying up the dues, by switching off their terminals, the inactive members' argument is that they are not active on the bourse and consequently there is no need for enforcing the capital adequacy norms on them.