Sebi Meet On Compulsory Dematerialisation Today

The Securities and Exchange Board of India (Sebi) will meet the representatives of National Securities Depository, custodians and market players today to sort out problems arising out of compulsory demat trading in the country.

The meeting forms part of a periodic review, which the market watch dog scheduled to streamline the mandatory demat trading. The institutional players have been complaining of lack of liquidity in the demat segment.

Some of the fund managers have expressed concern that T+5 rolling settlement has further added to the woes, as it discourages speculators from trading in this segment. Some of the market players have in fact asked the market regulator to have a re-look at the mode of settlement.

 

Lack of liquidity in the demat segment had forced the National Stock Exchange (NSE) to have both rolling and account period settlement in the depository segment.

Since January 15, the institutional players have been asked to trade only in the demat segment in the securities of eight companies. These are RIL, SBI, L&T, Tisco, ICICI, IPCL, IDBI and BoI. While trading took off at a positive note, lack of liquidity in this segment has discouraged the players from trading in demat segment.

As a fall out of this, many of the institutional players have been pressing sales in counters, which they fear might find place in the next list.