Oriental Not To Allow Nse Members To Switch Options

The Oriental Insurance Company (OIC) has stated that the NSE trading members will not be allowed to switch options from delivery-based cover to non-delivery -based cover or vice versa after the cut-off date, which is likely to be fixed at June 30.

This was announced by the OIC company secretary Sanjeev Chanana at a meeting organised by the Association of NSE Members of India on Saturday.

Meanwhile, the National Stock Exchange (NSE) has categorically stated that its trading members will have to furnish the indemnity bond, which will make them more responsible. Top NSE officials have threatened to terminate the membership of all those members who fail to provide the personal guarantee. This was said by R H Patil, managing director of NSE, at the meeting.

 

Addressing the meeting Patil said that all those members who are not willing to provide personal guarantee will have the freedom to walk out of the exchange.

"We would not mind running the exchange with 500 odd members. In any case, it is only in India that we have such a large broking community. Even countries with larger stock exchanges have less brokers," he said.

The NSE brokers, who had threatened to pull out of the exchange if they were insisted on to sign the indemnity bonds, softened their stand and requested the officials to give 15 days more to take a fresh look at the issue. The association has also asked the trading members to come out with constructive suggestions which can be put forward to the bourse for their consideration.

It is reliably learnt that more than 55 members have so far furnished the indemnity bonds as demanded by the exchange.

Patil said that though such a move may not fully eliminate the menace of fake, forged and stolen shares into the system, but will certainly help the bourse in checking the entry of such shares.

The OIC officials also said that the finer terms and condition of the new policy will be issued to the members by Wednesday, after holding detailed negotiations with the NSE officials.

The issue of dual membership also came up during the meeting and members expressed fear that they may have to opt between the NSE or the regional exchange. "We will push the capital market to a dead end by eliminating multiplicity of membership," Patil said.

Patil said that he recently received three letters signed by 60-odd members, asking the bourse not to introduce futures and options and instead start badla. He said that this was a concerted effort by certain members to tarnish the image of the bourse.

The members also urged the exchange to introduce badla along with futures and options.