Isesc Approaches Nsccl For Trade Settlements

The Indian Stock Exchanges Services Corporation (Isesc) has approached the National Securities Clearing Corporation (NSCCL) with a proposal involving settling all trades which take place at the integrated stock market system.

Isesc has put forward two suggestions to the clearing corporation the first option being availing of only the clearing house services and the second, a provision for the trade guarantee facility along with the clearing house services.

According to senior Isesc officials, the proposals have been sent to the National Stock Exchange. The modalities are being worked out and we have had an initial round of discussions with senior NSE officials, informed V Shankar, director, Isesc.

 

The Federation of Indian Stock Exchanges (Fise) will soon submit a formal application to the Securities and Exchange Board of India (Sebi) for granting Isesc the status of a stock exchange. Fise will send a letter to this effect to the regulator by next week. It will also send the rules and by-laws to the market-regulator for approval.

The Isesc steering committee will hold two meetings on June 21 and 22 to finalise the draft of the letter being sent to the market regulator. Fise will also send the memorandum and articles of association to Sebi.

Isesc was initially being touted as a service-provider, keeping in view the long-term objective of a unified stock market. Sources at Fise informed that the federation has not deviated from the original plan of being a service-provider. Except for listing of securities and enrolling trading members, the regulator has asked Fise to take responsibility for all other issues relating to the management of Isesc. Thus it made more sense to approach the Sebi for a stock exchanges status.

In the deliberations, the market-regulator had asked Fise to take complete responsibility of risk-management, surveillance, arbitration and clearing corporation.

Senior Fise officials said the Ahmedabad stock exchange has evinced interest in joining the integrated market system. Some Fise representatives will make a presentation before the Ahmedabad stock exchange members on June 27 to explain the details of the integrated market system.

As per Fise projections, only 20 to 25 per cent of the 3,500 members registered at the 12 regional stock exchanges are expected to take part in trading during the first two years of operations.