Vizag Bourse To Be Operational By March

* That it should be on-line trading from the very beginning;

* That should start clearing house within six months; and,

* That the bye-laws should be approved by Sebi.

The stock exchange will be sponsored by the Steel City Share Dealers Welfare Association (Scsdwa) which has almost been non-functional since March when trading was suspended till recognition is obtained from Sebi. A separate outfit will be registered for the stock exchange.

The Visakhapatnam stock exchange will be the second in Andhra Pradesh, the other one being in Hyderabad. Vijayawada is next line for a separate stock exchange.

Originally, Sebi had suggested that the Hyderabad Stock Exchange itself open additional trading floors at Visakhapatnam and Vijayawada. However, this proposal failed to take off.

 

Since suspension of trading in the Scsdwa, the members floated a new organisation, Steel City Securities Ltd, (SCSL) which was secured membership of the National Stock Exchange of India All current trading in this port city is on the National Exchange only.

According to SCSL Managing Director, who is also President of Scsdwa, G Sree Rama Murthy, daily trading on the National Exchange ranges between Rs 10 and Rs 20 crore. We do far more than the NE at Hyderabad, he said.

Sree Rama Murthy said enrolment of members will start soon after the bylaws are approved by Sebi.

Current thinking was to charge Rs 2 lakh from each applicant for membership as non-refundable deposit and Rs 1 lakh in securities or bank guarantee or in cash. Every member shall have Rs 5 lakh network. He agrees that the proposed stock exchange will be only an upcountry bourse, but justifies the proposal for a Rs 2 lakh non-refundable deposit on the ground that large funds are required to finance the infrastructure to meet Sebi conditionalities.

Moreover, when Scsdwa invited bids in December last for two vacant membership cards, one went for Rs 1.90 lakh and the second for Rs 1.70 lakh.

That was for an association that was not recognised. Now we are enrolling for a stock exchange, he said. To start with, the proposed stock exchange will enrol 300 members. Scsdwa has already built up considerable software in the past when it was trading.

Much of that will go in for the on-line trading infrastructure. We shall supplement them with what is most essential. We shall economise in setting up the Exchange, he said.

Scsdwa, set up in October 1993 as the unofficial stock exchange for this port city, has 368 members of whom only around 250 are active.

Trading had to be suspended earlier this year in the wake of charges of members selling stolen share certificates including that of the controversial Reliance Industries Ltd, bad deliveries, fraud etc. Sesdwa's records were also seized by police who are yet to return them.