While giving the conditional approval, Sebi has put before the following conditions to fulfill within six months before commencing the operations: The exchange should begin trading only after introducing on-line screen based trading and clearing house; the exchange should establish a trade guarantee fund/clearingcorporation within six months from the date of final recognition and the exchange should chart out rules, regulations and buy-laws with adequate provisions for investor protection with approval of Sebi and thereafter strictly follows them.

According to L Nagabhushanam, chairman and managing director of Vijaywada Share Brokers Ltd and founder president of the proposed exchange, said that the screen-based trading system was installed long back and the rules, regulations and bye-laws were already submitted to Sebi.

He said that due to the depressed market conditions once again we had to ascertain the interest of the aspirants. However, to organise between 100 to 150 members would not be a big problem. Each prospective member may have to invest Rs 4 lakh to Rs 5 lakh towards capital adequacy and guarantee fund to the exchange, he added.

HSE, in its earlier writ filed with the Andhra Pradesh High Court, had argued that the exchange shall have whole of state as its jurisdiction since there is no otherexchange in the state is operational. Though Steel City Brokers' Association of Visakhapatnam was awarded sanction of the exchange, it could not set up for lack of interest from the members due to the poor market conditions. Recently, HSE has obtained a status quo order from the High Court not to establish on-line trading terminal by BSE in and surroundings of Hyderabad and Secunderabad municipal limits till the next hearing on September 9.