``The board of directors of the exchange have considered the recommendations of the committee and decided to incorporate an appropriate clause in the listing agreement to enable its implementation,'' stated an NSE release. The exchange has decided to implement changes in clause 3 of the listing agreement, by introducing sub clauses (f), (g) (h) and (i). It should be recalled that a committee was constituted under the chairmanship of R Chandrasekaran in early 1997, to study the problems and recommend suitable measures to overcome the prevailing problems of fake, forged, stolen and counterfeit certificates and transfer deeds.

The sub-clause (f) specifies the confirmation to the guidelines for various market participants and a check on their activities by Sebi and the stock exchanges from time totime. Similarly, sub-clause (g) reads as follows ``To require the programme administrator to enter into an agreement with the exchange to carry out the functions and duties as envisaged under the safety standards for certificates and certificate authentication programme recommended by the expert committee set up by Sebi to minimise the menace of fake and forged certificates.''

Sub-clause (i) also specifies the need for the exchange to exercise disciplinary action against errant brokers in case of their involvement in introducing fake and forged share certificates in the system. Under this clause, the exchange is empowered to impose monetary fines also.

The Chandrasekaran committee also studied issues related to inordinate delay on the part of the transfer agents and issuers in effecting transfers which had created bottlenecks in the smooth functioning of the secondary markets.The committee had suggested two solutions -- the first emphasised on the need for issuing securities with such characteristics andfeatures that are not amenable to duplication while the second solution was to identify the seller or the registered investor who introduces the shares in the market. Besides the report which was accepted by Sebi, it has detailed the role of the stock exchanges in the system. Further, in order to maintain uniformity of minimum standards across all exchanges, Sebi has decided to issue guidelines in due course, once the respective exchanges accept the recommendations made in the report.