OTC makes trading in gilts free for members
Neena Sreedharan
MUMBAI, January 2: In a bid to ease the burden on its members, the Over The Counter Exchange of India (OTCEI) has offered them free membership for trading in government securities. On the other hand, the exchange will charge a refundable fee of Rs 15 lakh from dealers to trade in the segment.According to exchange officials, the exemption has been granted in view of the fact that the members have already paid a membership fee of nearly Rs 1.5 crore at the time of joining the exchange. Over the years, these members have been actively sponsoring many new issues, specially when the market was booming. Currently, however, these members are almost out of business on account of the depressed conditions in the primary market. The move is likely to help members such as financial institutions and leading merchant bankers who have closed shop and switched off their terminals. Many of them have been saddled with shares of issues which they had sponsored at high prices and which they have been unable to unload in
the market on account of depressed prices. The exchange has already prepared the entire trading software for this segment and run trials on the V-Sat network. The OTC board had recently passed the resolution to permit member/dealers of the exchange to trade in gilt securities. The exchange has also completed the integration of the four trading lines - V-Sats, I-Net, leased terrestrial telephone lines and dialup lines - to enable faster execution of trades. The exchange has started approaching banks which are major players in this segment. Members and dealers of the exchange will be permitted to trade in 800 government securities, an RBI release said. OTC expects trading in the segment to boost the turnover of the exchange. OTC received RBI permission to trade in government securities in October 1997.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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