"It would not take Sebi very long to move the entire index stocks to the compulsory demat trading list as Sebi realises the complete impact after January 4, 1999", Bhave said, while speaking at a seminar on capital markets-reforms for the 21st century, organised by Babasaheb Gawde Institute of Management Studies, in Mumbai.

Bhave said that after the introduction of index scrips for compulsory demat trading, when Sebi decides to bring in the top 100 scrips for compulsory demat trading, around 97 per cent of the Indian stock market in terms of market capitalisation and quantum of trades will be reflected in this list, making it the right time for introduction of rolling settlements.

Bhave said that Indians by nature are perceived to be averse to new ideas and change, but it is actually the other way round. "Lookat the way in which Indians have adopted to computer-based trading as against jobbing techniques used for years on end", Bhave said.

While Joseph Massey managing director of the Inter Connected Stock Exchange (ICSE) said that a crucial component of introducing rolling settlement was high levels of demat in the system. "It will take another one-two years before complete dematerialisation can be attained in local markets and thus there is still time for rolling settlement to be introduced", Massey said.

An important aspect of introducing rolling settlement is liquidity and that is how fast can our banking system transfer funds from one place to another, Sebi's division chief (derivatives) Nagendra Parakh. Parakh said that as fast as the shares are transferred in the system through demat mode so should the banking system gear up to meet the increased need for speedy transfer of funds through the electronic system. Another aspect of introducing the rolling settlement system would be on the client side, Bhavesaid.