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Nalini D'Souza and S Muralidhar
Mumbai, June 4: For Anand Rathi the view from the top shows that the task has been clearly set out in the run-up to the Millenium. Derivatives trading, corporatisation, professional management, expansion, online trading, depositories and restoring the lifeline of bourses, the elusive retail investor all intertwined in the race for the top. Rathi is ready with his blueprint. The main platform he wants is a level-playing field to take off into the next millenium.
Rathi explains that while NSE was allowed to spread out to every nook and corner of the country, Sebi imposed restrictions on BSE in terms of expanding BOLT terminals to cities where stock exchanges are already in place.
"Despite this hurdle, in less than 18 months we have spread out to over 202 cities. However, if only a level playing field was provided we would have made our presence felt in every corner of the country which in turn would have benefited our investors," he adds. It may be recalled that as per Sebi rules, BSE needs to sign an MoUwith the stock exchanges inorder to set up the trading terminals within the jurisdiction of those exchanges.
The investment of Rs 66 crore in setting up the second depository, Central Depository Services (CDS) according to Rathi, was with the intention to provide an alternative to investors which would help arrive at fair pricing structure.
BSE has also introduced market making system along with a cut in the tick sizes which has helped improve the liquidity in the system. This according to Rathi, helps keep the transaction cost at the lowest ebb.
In order to beef up surveillance and make the system more transparent and efficient the exchange has also decided to set up an online surveillance system by the end of June.
Interestingly, BSE has also taken up the role of a big brother by offering small exchanges the help to set up a risk management system in place.
"Considering the cost involved in setting up the risk management and surveillance system we have extended our support to the smallerexchanges," says Rathi.
Working on the motto of providing best possible protection to investors, the exchange has decided to set up `Z' category. In the first phase of the exercise BSE sent out notices to 500 companies which have been defaulting in terms of resolving investor complaints and also abiding by the listing agreement. Out of the 300 companies, however, only two have responded (Manisha Agro and Matru Smruti Trading). Another 10 companies have also submitted their annual reports to the exchange.
The disbursements from the customer protection fund during the period between 1996-97 to 1998-99 has gone up from Rs 0.77 crore, to Rs 8.96 crore.
Similarly, BSE has also strengthened its hold on the IPO market by vetting every prospectus before allowing the companies to market themselves by using BSE's name.
In a move to keep pace with the developments in the equity markets, the exchange has also prepared itself for setting up the derivatives segment, in terms of man power, technology and expertise.However, Rathi, also feels that ``since our cash markets have not matured, derivatives have to be implemented with all the necessary safeguards.''
Image building, corporatisation and transperancy are high on the agenda of the exchange. The exchange is also examining the feasibility of corporatising BSE, which would not only make them more transparent and accountable but will also enable them tap the market for funds to implement their future plans.
Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.
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This story was printed from Net Express located at http://www.expressindia.com. Net Express provides a portal to India, with news from The Indian Express and The Financial Express along with sites on travel and tourism, the entertainment industry, the power sector, the environment and much more.
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