Nse Members Withdraw Plea On Indemnity Issue

The Delhi-based National Stock Exchange Members Association (NSEMA) has decided to withdraw its court appeal against the NSE and is now seeking an amicable solution to the issue of members signing indemnity bonds.

The NSEMA had earlier planned to file a writ petition yesterday with the Delhi High Court to seek a stay on the issue of signing bonds. With the NSE top brass agreeing to extend the deadline till July 1 (when the executive board meets in Mumbai) and examine the memorandum already submitted, there would be no need to seek legal redressal on this issue, sources said.

Alongside, the disciplinary committee of NSEMA will draw up a report to be submitted to the NSE, with a one-point agenda of how to proceed on the indemnity bond issue. We will suggest modifications in the current set of terms and conditions after receiving views from all members. The report is set to be ready in 2-3 days, V D Aggarwal, president, NSEMA told Business Standard.

 

NSEMA had issued a questionnaire to its members in May-end for their response on issues relating to the indemnity bond, ensuring client identity and reducing risk of fake/forged shares at the markets. Aggarwal said so far 200 members had already forwarded their replies to the exchange and their responses would be incorporated in the report being prepared.

In its meeting with finance ministry officials last week, NSEMA had sought full-fledged membership status for its dealers, with voting rights for the constitution of the exchange board.

Commenting on the meeting with finance ministry officials, Aggarwal said most of the problems faced by members would not have flared up to such an extent if proper representation was allowed on the board.

NSEMA had held a protest march against NSE policies, including requirement of personal indemnity bonds from shareholders of corporate members. The NSE members had assembled outside the offices of the NSE at Delhi, Calcutta, Chennai and Ahmedabad and submitted a 14 point memorandum, which included the demand of converting the status of an NSE member from a `licence member to a full-fledged member with a voting right to constitute the board. The crucial points in the programme included the reduction in the cost of transactions at the exchange, while not charging annual VSAT maintenance charges.

The association has also called for members to be treated as an inseparable part of the exchange.

Aggarwal said that the decision not to move court was taken in view of the NSE top brass stand. ``We have to work together on several key issues, so there is no need to create tensions, he said.