Currently, the upper limit for the gross exposure (aggregate of scripwise cumulative net outstanding purchases plus sales) of a broker has been placed at 20 times of the broker's base minimum capital plus additional capital deposited with the exchange. This limit is, however, in addition to the present capital adequacy and other margin requirements. However, all institutional business and sales marked for delivery are not considered while computing the gross exposures.

"While SEBI's clarification is still awaited, it is felt imperative to commence monitoring of exposures of members with immediate effect," stated BSE's surveillance department's notice to the brokers on July 24.

In the absence of SEBI notification, the exchange has decided that for the time being, the gross exposure (cumulative netoutstanding purchases plus cumulative net outstanding sales) of Type I brokers (brokers who have opted for carryforward business) in B1 and B2 group scrips and Type II brokers (brokers who are not allowed to carry forward positions) in A, B1 and B2 group stocks on any day during a settlement would be restricted to 20 times of the base minimum capital.

While building an online surveillance mechanism, the exchange is also in the process of developing a suitable software to provide warning messages to the brokers on their BOLT trader workstations (TWSs) on the onset of reaching 70 per cent, 80 per cent and 90 per cent of their respective gross exposure limits.

"The brokers who will fail to restrict their trades within the stipulated limit of the exchange will have to face the consequence of being deactivated," a BSE official said.

However, the exchange has decided to reactivate the trading system of these brokers only after they deposit the additional capital to cover the exposure in excess of the limit.