Bse Identifies 1,234 Cases Of Price Rigging

These are some of the findings of the exchange's action taken report (ATR), a copy of which was made available to Business Standard.

According to the report, the area of investor grievance redressal had been given top priority. With a revamped arbitration system, in the last three months a total of 1,823 arbitration cases between members have been dealt with and disposed of.

As a result of this, the total back-log has been reduced to 755 cases.

Arbitration between members and non-members now stand at about 300 outstanding cases as against around 350 four months ago. The report has said that disciplinary action has been taken against 7 members of the exchange because of their involvement in price rigging cases.

 

Disciplinary action included three months suspension of trading rights of members as also imposition of monetary penalties. Further, in 17 cases where the exchange officials have unearthed clear evidence of price rigging, auction proceeds have been impounded by the exchange.

The exchange has also ensured quick collection of margin cheques within 24 hours of execution of the trade. The exchange has implemented a 4-tier margin system which includes margins on gross exposure, net exposure, mark-to-market and also on concentrated holding.

On the computerisation front, the Mumbai bourse's on-line trading system is currently being revamped by introduction of UNIX-Open platform interfaced with BOLT. This will enable a faster settlement process and all settlement-related data will be directly downloaded to broker TWS without any human intervention.

The report has said all of BSE's 5,000 scrips have a seven-day trading cycle and are routed through the clearing house.

This has reduced the counter-party risk as the integrity of the transactions is the responsibility of the clearing house.

From April, the bourse has adopted the practice of announcing trading and settlement cycle six months in advance.

According to the report, there has been only one instance when the settlement has been delayed by less than 12 hours.

This too happened at the initial stages of change-over. Members, who have delayed payment of settlement funds, have been pulled up by the exchange administration and in some cases their TWS have been de-activated. The bourse's auction system has been totally overhauled in this period and has been put on-line.

The exchange has also developed on-line system for bad delivery process in which bad deliveries have been routed through the clearing house and the buyers will get their shares duly rectified within three weeks.

Surveillance system on the BSE has been also revamped through the process of identifying the scrips in which price and volume movements are abnormal. These scrips are put on spot transactions whenever warranted. Additionally, abnormal price spurts are checked through circuit-filters and circuit-breakers.