Second Phase Of C-Star Project To Commence Soon

The second phase of the C-STAR project of the Calcutta Stock Exchange (CSE) will begin within a few days with the bourse committee members deciding to go ahead with the plan of extending computerised trading throughout West Bengal.

A notice to this effect will be sent out within a day or two and brokers will be requested to submit applications for V-SATs.

Sources said CSE will prefer to sanction V-SATs where concentration of applications are high and the cost can be reduced by sharing with other brokers.

The cost of a single user of V-SAT has been put at Rs 3.5 lakh and each additional user will have to pay Rs 50,000, subject to a maximum of four users per V-SAT. This is only the down payment. In addition, there will be a monthly recurring charge of Rs 10,000.

 

Outside Calcutta the common investors have to go through a tedious process of coming to Calcutta to invest in the share market or are serviced by sub brokers. This is not only inconvenient but gives rise to situations where the ordinary investor is easily duped.

The extension of C-STAR to areas outside Calcutta will ease transactions to a great extent.

The exchange proposes to sanction V-SATs to brokers who will set up trader terminals outside Calcutta but sources said these centres will be mainly operated by sub brokers who will have an arrangement with the brokers regarding splitting of brokerage fees and other formalities.

However, they made it clear that the broker registered with the exchange will be responsible for all transactions and bad deliveries associated with his terminal outside Calcutta whether he operates it himself or not.

The extension of C-STAR will not require any permission as no other exchange is operating in this area. However, if C-STAR is extended to other states then permission will have to be taken from the relevant exchange or a memorandum of understanding signed -- like the proposed link up with Bombay Stock Exchange's BOLT.

The likely areas identified for extension of online trading are Durgapur, Asansol, Siliguri, Malda, Behrampore and Siuri. Brokers said this will increase their turnover by 50 per cent.

Meanwhile, sources said delivery of V-SATs for phase I of the project (within Calcutta) whose order was placed with HCL-Comnet is delayed and the exchange authorities are putting pressure on the suppliers to speed up things.

However, several CSE brokers are forecasting doom for online trading even before it takes off and are fearful that trade volumes will plummet and they will be left with empty coffers. They admitted that under the existing rules, the only way to survive and compete with the National Stock Exchange is to merge all other exchanges. But this is highly unlikely.