It is in consultation with the Reserve Bank India (RBI) for considering security aspects of electronic fund transfer.

"Ultimately, intermediaries, including brokers who route the trades through exchanges, are necessary for development of the capital market even in the Internet era. And clarity on all the aspects pertaining to them is a must," Sebi chairman DR Mehta said while speaking on the Impact of e-commerce on Indian capital markets at a seminar here on Friday.

Sebi has also issued a circular recently allowing the use of wireless application protocol (WAP) technology for transacting trades on exchanges.

Sebi was considering the proposal of launching IPO's through the stock exchange route, which would not only reduce the time involved in the entire issue process, but also lead to significant cost benefits for the issuers.

Many of the exchanges were planning to launch cyber cafes to be used by the brokers.

The Indian capital market was well poised to become one of the most modern markets in the world, he said. "Over the last years there has been a phenomenal growth in the Indian capital market. The daily volume in all the exchanges at present has picked up from Rs 500 crore to around Rs 15,000 crore, about 35 times over last five years," he said. There were some initial problem with the sofware and the volumes were expected to grow exponentially once the software is ready.

Mr Mehta also said that "technology will ultimately lead to efficiency, transparency and reduction in costs of stock exchanges."The regulator will carry on with the rolling settlement in A group scrips but would do it in a gradual manner. "Presently the market is not equipped enough to carry on with rolling settlement. There is a chance that volumes will plummet, which might affect investors adversely" Mr Mehta added. At present, all the 24 stock exchanges were computerised and have 100 per cent online trading facility, which even the NYSE could not boast of. More than 98 per cent of the business is done in dematerialised form and all this was achieved within three years of launching.