MUMBAI, April 6: Dealers at the Over The Counter Exchange of India (OTCEI) have urged their recently-appointed managing director to lower the hefty Rs 2-lakh fee payable for trading in the permitted segment of the exchange.OTCEI, which is battling for survival with daily volumes down to a dismal Rs 7 lakh, has recently had a change of guard with the board appointing Joseph Bosco, a senior official of the National Stock Exchange (NSE), as its managing director. Bosco's appointment is currently awaiting clearance from Sebi.
The OTCEI board has, however, asked Bosco to come out with a revival package at the earliest. In a series of meetings held with dealers in Mumbai and various other cities, Bosco has been busy collecting suggestions from members to revive the exchange.
Some of the important recommendations put forth by the dealers include doing away with the Rs 2-lakh entry barrier set up for dealers to trade in the permitted segment. Other improvements also need to be made in the segment to make itmore attractive, dealers said.
"In today's market with business at a low it is just not feasible for members to pay up Rs 2 lakh. This is in addition to other expenses they have already incurred. Most members are not operating at the exchange. For these members to pay even a penny more makes no sense," said a dealer.
The permitted segment, which was launched last year, has not been able to attract huge volumes as was earlier expected. The segment was specially introduced to induce higher volumes on the exchange and give dealers the advantage of trading in liquid counters.
Many dealers who have met Bosco have joined the permitted segment and have invested substantial funds in infrastructure like V-Sats and a new trading software. These dealers are now asking the exchange authority to pave the way for more dealers to trade in the permitted segment as this is the only way depth and liquidity would be imparted to the segment.
Members have also sought the immediate implementation of the hybrid tradingsystem for the listed segment which has been in the making for the last one year. This software is a combination of the quote-driven and order-driven trading system. It is aimed at doing away with the ridiculous prices sometimes quoted by the market makers.
The dealers also discussed the possibility of a merger between OTC and NSE, which was promptly turned down by the new managing director.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
