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PRESS TRUST OF INDIA
NAVI MUMBAI, Aug 29: The Inter-connected Stock Exchange of India (ISE) on Saturday commenced trial runs with the hope that once the exchange goes live in a month's time the trading activity at the 15 regional stock exchanges promoting ISE would get a tremendous boost.
NAVI MUMBAI, Aug 29: The Inter-connected Stock Exchange of India (ISE) on Saturday commenced trial runs with the hope that once the exchange goes live in a month's time the trading activity at the 15 regional stock exchanges promoting ISE would get a tremendous boost.
Sebi executive director Pratip Kar inaugurated the mock testing of the V-Sat-based ISE system on Saturday. He said that during April-June 1998, six of the 22 stock exchanges in the country accounted for 98 per cent of the trading turnover.
Kar said the remaining 16 exchanges accounted for a meagre two per cent and moreover, five of these did not do any business in the first quarter of 1997-98.
He noted that the arrival of the National and Bombay stock exchange's terminals across the country had had an adverse impact on the regional exchanges' business.
ISE managing director Joseph Massey told reporters that Sebi has already inspected the trading, clearing and settlement and the risk management systems and procedures of ISE and is expected to accord final recognition to the exchange within a fortnight.
Massey hoped that ISE would act as a catalyst in increasing the trading turnover of regional exchanges and said the first goal after live trading commences is to expand geographical coverage of regional exchanges.
The new exchange, which would connect the stock exchanges of Bangalore, Bhubaneshwar, Chennai, Cochin, Coimbatore, Guwahati, Hyderabad, Jaipur, Ludhiana, Madhya Pradesh (Indore), Magadh (Patna), Mangalore, Saurashtra Kutch (Rajkot), Uttar Pradesh (Kanpur) and Vadodara, would enable members of one exchange to trade with members of the other exchanges through a common infrastructure.
The exchange has finalised a common central clearing bank arrangement across exchanges with ABN Amro Bank as the prime bank and Vyasya Bank as the correspondent bank for an efficient and system-driven fund collection and transfer system.
Kar dwelled on the need for a widespread electronic fund transfer system and said the regulator has taken up the matter with the central government and the Reserve Bank of India.
He said ISE would be granted formal recognition soon after completion of the necessary documentation.
With regard to the viability of exchanges, Kar said Sebi would only ensure that stock exchanges remain fair, transparent and efficient. ISE, which was initiated in 1996, received an in-principle approval from Sebi in October, 1997. The project took root when MR Mayya, former executive director of BSE, prepared a concept paper on inter-connectivity. Subsequently, the FIRE project under the aegis of USAID prepared a techno-feasibility report and the final project report was delivered by CC Choksi & Company.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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