At Wednesday's meeting it was felt that while volumes across the exchanges would fall, the market was in any case shortly going to move to a rolling settlement mechanism which would render a common uniform settlement infructuous.

``The general consensus was that uniform trading cycles will result in shrinkage in arbitrage business and consequently will lead to a fall in the volumes and turnover of the exchanges,'' said M R Mayya, chairman of the committee.

"The present time is not opportune for the introduction of uniform trading cycles considering that the markets are in a bearish phase,'' he added.Although the committee comprises of representatives of Bombay, Calcutta, Ludhiana, Jaipur, Madras and National Stock Exchanges, the meetingheld on Wednesday was attended by the representatives of 21 stock exchanges.

"Representatives of all the exchanges except Guwahati and Indore were attended the meeting," said Mayya. The committee also felt that introduction of uniform settlement in a bearish market would in turn affect not only the liquidity of the markets, but also increase the intra-day and intra-settlement volatility.

"Arbitrage if done with actual delivery does not lead to volatility and hence is healthy for the markets and the broking fraternity as the clientele business is already on the downside," said a committee member. The committee also deliberated on issues related to whether there is any empirical data to prove that in the absence of uniform settlement arbitragers use the system to rig up prices.

In the progressive scenario of rollings settlements becoming the norm with high levels of demat trading, the committee members felt that all exchanges would then have a common settlement and thus having a uniform settlement at thisstage would make no sense. In any case, it would take exchanges sometime to make changes in their software by when rolling settlements would be in place.

The committee was formed in July, 1997, and appears to have failed to grapple with the modernisation that has taken place in the market which has rendered issues such as uniform settlements irrelevant. Interestingly, again, the committee has not been wound up and will have another meeting, the date for which has not been fixed.

"Code of ethics" panel for exchanges meets
The Sebi panel on the "code of ethics" for stock exchanges has discussed issues which could help improve the integrity of the markets and also give a fair perception of the system.

"We need to restore the confidence of the investors and create the perception of an integrated market," said L K Singhvi, senior executive director of Sebi, incharge of investigation and surveillance. The committee comprises of representatives of Bombay, Delhi, Calcutta, Kanpur, Madras and the NSE.According to committee members, the discussions were centered around key issues like that of disclosure norms for the top officials of the exchanges. Disclosures in terms of the shares held by the officials and also the access to sensitive information which needs to be restricted within the administrative staff of the exchanges were also discussed.

"Conflict of interests could lead to unnecessary interference with the administrative functioning. This needs to be stopped," said a member. Interestingly, the committee also dealt on the primary issue of whether the broker-president should continue to trade while in office. The committee is likely to meet again in January, 1999.