Bourses Divided On Uniform Settlements - Sebi

Indian stock exchanges are divided on a proposal to introduce uniform settlement periods in all bourses, the chairman of the Securities and Exchange Board of India (Sebi) said yesterday.

"Some exchanges favour it, others oppose it," DR Mehta told reporters after the inauguration of a nationwide network for electronic trading on the Delhi Stock Exchange.

He said Sebi had received recommendations of an expert committee, the Verma Committee, on stock exchange procedures including settlements, and would discuss it at the board level. The Verma Committee's report will be released to the public soon, Mehta said.

Mehta also pointed out that Sebi is planning to acquire stock movement monitoring computer software to check irregularities like price rigging.

"We need a more sophisticated system of surveillance and are thinking of having a stock watch system," he said.

Sebi officials were scheduled to attend a presentation later this week on computer software which would enable the market regulator to check stock movements on a real-time basis.

Steps such as electronic trading and computerised monitoring will improve the efficiency of trading in India's stock exchanges, Mehta said.

He said India's bourses must keep up with the latest trends in electronic commerce and trading, which would become crucial after a proposed introduction of full convertibility of the Indian rupee on the capital account, which would allow free two-way movement of capital. "If it happens,...it is better that you are prepared," Mehta said.

"The situation is becoming so competitive that unless you keep abreast of the latest developments,...you may not succeed," he said.

"The survival of some stock exchanges which do not make these changes will be at stake," he said. Sebi was keen to boost dematerialised trading involving electronic transfer of shares in order to improve investor confidence in the Indian market, he said.

"The next six to eight months are going to be critical," he said.

Press Trust of India adds: Finance minister P Chidamabaram called upon the stock exchanges in the country to work together in building investors confidence. He also expressed the hope that investors would return to the capital market in a big way.

Inaugurating the Vsat (very small aperture terminal) satellite communication network of the Delhi Stock Exchange yesterday, he stressed the need for connectivity of various stock exchanges in the country.

The introduction of Vsat would mean an increased level of efficiency and quality matching the technology anywhere in the world, Chidambaram said adding that 98 per cent of all trading in India is now screen based.

He said tremendous progress has been made in the administration of stock exchanges in the last five years. There has been some movement in shares recently and the interest evinced by investors in even B1 and B2 shares shows this, Chidambaram said.

Through the Vsat network, on-line trading can be easily set up by installing small dishes at the brokers offices. Trading information is downloaded or updated quickly through the high-speed Vsat link.