In another far-reaching move, the regulator has also made it mandatory for companies to disclose quarterly the names of the shareholders having over 1 per cent stake, to the stock exchanges which would then have to be posted on the websites of the bourses and the companies.

The modalities of the move towards voluntary rolling settlement with carryforward would be worked out shortly. Currently, 15 B1 group stocks are under the rolling settlement mode, with carryforward facilities as an experiment to test its impact on the market. Voluntary rolling settlement is currently permitted for all A group shares, but not with carryforward facilities. The BSE carryforward version is Borrowing and Lending of Securities Scheme (BLESS) and NSE has the Automated Lending and Borrowing Mechanism (ALBM).

The decision came after a crucial day-long meeting between the regulator and all the country's stock exchanges in Mumbai. Addressing a press conference after the meeting, Sebi chairman DR Mehta said: ``This is another step towards rolling settlements in active stocks.''

Speaking to The Financial Express after the meeting, Sebi executive director Pratip Kar said: ``This move aims to provide a fillip to rolling settlements. In any case, it's on a voluntary basis. We'd like to see how the market takes it. Sebi remains committed to rolling settlements.''

In a slew of other decisions, Sebi also put in place the code of ethics for directors and key functionaries of stock exchanges, and decided to form a small group to work out the modalities of how the disclosures under the code, including those for proprietary trading by the president, vice-president and other directors, should be made. The group will consider whether to make such disclosures quarterly, monthly, or weekly, Mr Mehta said. Bourses will have to set up ethics committees within their governing boards, with a compliance officer, to monitor how the code is being adhered to. Mr Mehta said, as in other cases, a retired judge may be asked to head such committees.

The Financial Express had, on January 16, reported that the regulator had laid down tough disclosure norms under the ethics code. A lot of debate was reported to have been generated at the meeting on the ethics code, sources who attended the meeting told The Financial Express. However, Sebi was clear that the code would have to be implemented forthwith, and it was only a matter of the modalities of implementation which needed to be thrashed out.``The code would be implemented shortly,'' Mr Mehta said.

Another decision taken by Sebi and the exchanges was on the implementation of the recommendations of the Kumar Mangalam Birla committee on corporate governance. As part of this, stock exchanges would have to set up separate cells to monitor, on a quarterly basis, the compliance by companies, which includes appointment of independent directors, setting up of audit committees and shareholders' committees.

It has also made it mandatory to have client codes for gross margining and in case the bourses are not able to do this by February 28, the carryforward facilities for these exchanges would be withdrawn. By the end of March, if this is not implemented, the stock exchanges would not be allowed to conduct trading sessions. The meeting also decided to set up a sub-group to bring in sub-brokers' clients within the ambit of the client code stipulation, as this was not being implemented under the present system. Sub-brokers will now have to provide an audited quarterly report on the margins collected for day trading from their clients. At present, sub-brokers do not charge the 10 per cent margin from their clients for day trading.