According to Parekh, most of the CSE brokers are in bad shape because they have been hit by dwindling business volumes and rising operating costs in the post-computerisation era.

He felt that the introduction of a weekly settlement cycle in the specified group would further shrink volumes unless it was synchronised with online carryforward system for which the exchange is awaiting approval from Sebi. The CSE has proposed to start with the weekly settlement from August 21, 1998.

On the need to increase business, Parekh said one way was to attract foreign institutional investors (FIIs) and domestic financial institutions by offering better service. Till a couple of years back, the exchange had steady business flows from institutions.

Thissituation was reversed suddenly with the institutions preferring to trade on the NSE and BSE, and CSE was more or less bypassed presumably on transparency and safety considerations. Parekh was hopeful that the improved systems would help bring these investors back into CSE's fold.

Besides, strong marketing was required to woo retail clients who have deserted the secondary markets for want of adequate safety mechanisms. Parekh, however, believed that the return of the investors in a big way would become possible when the demat drive picks up momentum and more scrips become depository eligible.