Nse May Soften Stand On Indemnity Bonds

The brokers have also said that the firms themselves should have the freedom to decide who is the dominant shareholder. Some dealers believe that the bond goes against the concept of limited liability for corporate members and against the Companies Act. This was also being seen as going against the very character of corporate membership on NSE.

However, once NSE decides to climb down on the basic issue of the all-encompassing nature of the bond and limit its scope, the NSE members are unlikely to continue the standoff on the other issues.

A major NSE broker in Calcutta says: When the exchange as an entity provides an unlimited guarantee on the trades, it has every right to seek whatever cushions it feels comfortable with. The bond is such a cushion, provided it is of a limited scope. A number of members are keen to go along with the exchange if the scope is limited.

 

The problem of fake and forged shares has become acute on the bourse with NSE finding that several of its members have introduced these shares into the system.

The bourse feels the members do not put in place adequate checks against such instances and also at times do not know their clients well enough.