Nse Brokers Seek Ownership In Bourse

Brokers at the National Stock Exchange have demanded a share in the ownership of the exchange.

The NSE Brokers Association has recently represented to Securities and Exchange Board of India (Sebi) they should be given a portion of shares in the exchange.

The association has also demanded that in case the exchange authorities do not agree to this demand, Sebi should not renew the recognition given to the NSE as an exchange. The recognition of NSE is due to come up for renewal in May 1998. Explaining the justification for the demand, Vinod Gupta, president of the NSE Brokers' Association told Business Standard that the Securities Contract Regulation Act clearly defines a member of the exchange as a shareholder.

 

And since only members can be the brokers, they must be shareholders of the exchange. Not allowing the brokers to be shareholders is a violation of the act, he said. "We are not interested in the daily administration of the exchange. We only want to guide it so that it becomes a stronger body," Gupta said.

For this to happen, brokers must have voting rights, he added. Opposing the demand of the brokers, the top level office bearers of the NSE said that brokers can not be given shares in the exchange, as the entire shareholding is with numerous institutions.

They also pointed out that the demand has been generated by the NSE brokers who want to govern the affairs at the exchange in line with the BSE, which is basically a broker-run exchange.

Brokers have already been represented on the executive committee of the NSE, but now they also want a seat on the governing board, a demand which cannot be met, sources added.

Sebi has not yet taken a decision , but it will soon discuss the brokers' demand with the NSE and other authorities, sources at the regulatory authority said.

If Sebi does not approve of our demand, we will have to seek legal opinion, said Gupta. He did not rule out the possibility of the association going to the court on the issue.