Mumbai, July 1: The Bombay Stock Exchange (BSE) has renewed its integrated comprehensive insurance policy with the New India Assurance Company with effect from July 1. The move will facilitate small-time brokers to ensure risk cover for positions less than Rs 1 crore.

According to the terms of the renewal, the scope of the cover has been widened to include cover for transit of securities despatched to members by their clients, sub-brokers and franchisees, provided the member is legally liable. A mandatory cover of Rs 1 crore, which was made available for each member of the exchange, will be reduced to Rs 50 lakh for members who may seek a reduction.

For members seeking a cover of Rs 1 crore, the premiums will be Rs 20,000 annually, which will be directly recovered by each member from the general charges account. However, for members seeking a reduced mandatory cover of Rs 50 lakh, a premium of Rs 12,000 will be charged.

The exchange has also made provisions for members with larger volumes. For a member who has opted for a cover of Rs 4 crore, an additional premium of Rs 21,000 will be levied.

The additional amount is computed on the basis of a 5 per cent service tax as additional premium for a cover of Rs 3 crore.

Brokers who seek a total cover of Rs 25 crore, will have to shell out Rs 1.68 lakh as additional premium. Deals done through this segment will be guaranteed by the soon-to-be operational trade guarantee fund and members will not be allowed to give any hand deliveries to other memebers.

During the course of trade, the seller will be permitted to specify the lot offered for sale. However, in the absence of such a minimum trade quantity, the transaction may be executed at market lot or in multiples thereof.

For deals made under the new rolling settlement, the circuit filter will stand reduced from 15 per cent to 10 per cent. The circuit filters, however, will be applicable on the closing rates available in the normal segment.The no-delivery information provided for the normal segment will also be applicable for trades under this new segment.

One of the important aspects of `sunshine trades' will be that there will be no auctions conducted. But shortages, if any, will be directly closed out at the highest price for the shares in this segment.

The payment will be done through directly debiting or crediting of members' accounts with the Bank of India—Stock Exchange branch. The members will, therefore, have to ensure that they maintain a clear balance in their current accounts with the bank everyday. If sufficient funds are not maintained by a member in his account on pay-in day it would be treated as default.

The identities of the members dealing in this segment will be disclosed at the discretion of the user. The members will have to maintain a separate order book for the T+5 settlement.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.