Justice Dhanuka said that the committee has stressed on the need for depository participants (DPs) to share the liability factor. The committee has therefore emphasised the need to introduce changes in section 16 of the Depositories Act, 1996.

Section 16 of the Depositories Act, 1996, makes a depository liable to indemnify the beneficial owner for the losses caused to him on account of a DP's negligence.

Condemning the current practice where the onus of liability falls entirely on the depository and the benefits are passed on to the DPs, the committee has said that the liability can also be shared by the depository participants. "Losses caused due to the negligence of the DP should not be borne by the depository, but by the DPs," said Dhanuka. The committee is also of the view that stamp duty exemption offered to the depository should be extendedto the transfer of all securities, debentures and bonds.

"Stamp duty may be levied at the stage of `issue' of securities and not at the stage of transfer," explained Dhanuka.

The committee, which also examined the existing SEBI Act, 1992 and the SCRA, 1956, has drafted new rules to be called the Securities Act, 1998.

According to sources, the Securities Amendment Bill, 1998, has practically been finalised by the committee which is likely to formalise the report by May 8. The committee has also recommended a draft bill which would comprise section 113 of the SEBI Act.

The committee is also likely to finalise issues such as the regulation of professionals operating in the securities market, provision of a firm basis for the regulation of self-regulatory authorities, giving more powers to SEBI in relation to diverse matters in the securities market and recovery of money as arrears of land revenue at its meeting scheduled for May 5.