BANGALORE, May 7: The May 31 deadline set by the Securities and Exchange Board of India (Sebi) for completion of client-registration norms by all bourses is likely to be a non-starter.

Exchange officials are now grappling with stiff opposition from brokers, who are adamant on abolishing the rule. The Bangalore Stock Exchange (BgSE) top brass did not offer any comments, saying it was too premature. However, they admitted that brokers have resisted the move. The issue is likely to be discussed at the extraordinary general meeting of BgSE on Thursday.

The issue has stirred up a hornet's nest among the brokers who feel that it threatens their existence. "The regulator has asked us to furnish details of our clients. But what happens if he defaults. Will they do anything? In any case, we are the sufferers. The maximum that Sebi can do is to flash the news on TV or on the notice boards," opined a leading BgSE broker.

"By insisting on these norms, Sebi is only creating more paperwork. They are saying the steps will help check defaults," said another broker.

Many are of the view that the regulation is only a piece-meal approach to solve the defaults issue. The majority feels that stockbroking is like any another industry. It is enterprise-driven and as such it should be left to the broker to decide who should be the clients. "In many cases, investors do not give the required documents Sebi asks for, like driving licence, passport, voters identity card. What does it expect us to do in such cases.

They are also our clients. Should we tell them to fend for themselves, or does the regulator imply that only those who are in possession of necessary documents should come to stockmarkets? Similarly, there are instances of firms in which activities are often kept secret. One cannot ask them to furnish documents like partnership deed, IT statements."

"The measures the regulator has taken so far are peripheral. They have never gone deep into problems. Passing ordinances like this will only kill the business. Brokers should have the freedom to act in a manner they feel is right within the defined parameters," he opined.

Another senior broker who has been in the business for over 25 years says, "Where was Sebi till now. By this rule does it mean to say that all these years we were not careful? We have always been careful while selecting our clients," he adds.

"The bourses also have a big role to play in the growing default syndrome. In their zest to attract more members, they have often given membership to people without checking their credentials. These people will go to any end to attract business. Why should brokers alone suffer the consequences. Why is the watchdog silent on these things," said a BgSE broker who is also a NSE member.

All the same, BgSE authorities are hopeful that the May 31 deadline would be met. They are confident that brokers would sink their differences and help the bourse. "We have had excellent relations with our member-brokers. They have always backed us," a senior BgSE official said.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.