Sebi Pats Bse For Better Settlements

The Securities and Exchange Board of India has lauded the Bombay Stock Exchange for improving settlements at the bourse.

Simultaneously, the watchdog has expressed concern that a section of members on the bourse are not fulfilling their capital adequacy norms as prescribed by it.

Sebi has given a 100-plus page report to the exchange administration and has asked it to submit a detailed reply in a month.

BSE is also expected to furnish the quarterly progress report relating to implementation. The first of these reports will be sent to the regulator within 15 days after next June.

In its report, Sebi has also expressed concern about the fact that the bourse continues to credit 50 per cent of the interest amount accrued on the one per cent listing security deposit to Brokers' Contingency Fund. This, Sebi said, is not in order.

 

It has also directed the exchange to take steps to dispose of pending arbitration cases and investor complaints. According to the BSE president M G Damani, the exchange has already taken steps in terms of disposing the arbitration cases.

"All appropriate steps have been taken by the exchange to resolve pending arbitration cases and investor complaints. Steps will be taken immediately to ensure adherence to the capital adequacy norms and the contingency fund will soon be placed in order," he said

Sebi has observed in the report that while in 1995-96, there were 16 delays due to different reasons in settlements, during 1996-97, of the 26 settlements completed up to September 30, 1996, there has not been a single day's delay.

The turnover on the bourse, the report says, has increased from an average of Rs 215.79 crore per day in 1995-96 to Rs 492.71 crore per day in 1996-97. However, the delivery figures have fallen substantially in the A group securities.

The deliveries in the A group securities stood at 7.1 per cent in 1996-97 as against 14.4 per cent in 1995-96.

However, the percentage of deliveries in the B group shares has gone up from 33.9 per cent in 1995-96 to 41.7 per cent in 1996-97.

While lauding efforts initiated by the bourse to introduce screen-based trading in odd-lots and auctions, the regulator has observed that since the change to the screen-based trading system on the bourse, there has been an increase in market transparency, liquidity, elimination of mismatches and improvement in information efficiency.

The inspection was conducted by the regulator between October 7-18, 1996.