"The post of president of stock exchange should be dispensed with and there should be a non-broker chairman of the governing body appointed by government," Gupta told PTI.

He said at present the president of stock exchange was an interested party and his position could give rise to conflicts of interest in the functioning of exchanges.

There have been several instances of alleged price manipulation involving brokers including some governing members, resulting in high volatility and payment crisis on the stock exchanges.

Among the recent cases was the payment crisis on account of the high level of price volatility in the scrips of Videocon Internation, BPL Ltd and Sterlite Industries in April-May last year.

Due to the crisis BSE president J C Parekh was sacked by Sebi lastmonth.Similarly, in 1995 there was default by some BSE members involved in the rigging of share price of MS Shoes leading to closure of BSE for three days.

Gupta said looking at the current situation Sebi should review the constitution of stock exchanges board in an effort to improve the governance of the bourses.

Gupta said Sebi should rethnik over the governance and functioning of stock exchanges as the exchange boards have not worked effectively. He said despite 50 per cent representatives from public nominees on exchanges board, the system has not worked effectievly.

Sebi in 1992-93 had made changes in the formation of stock exchange board with 50 per cent elected members from stock exchanges and rest non-elected ie public nominees. These changes were partially based on the recommendations of GS Patel committee on stock exchange reforms. Dr L C Gupta was also member of the committee. Gupta said the market regulator partially implemented the recommendations of the committee and after the recentcrisis on stock exchanges, leading to sacking of BSE president JC Parekh, Sebi should rethink over the present system.

He said there has been considerable tightening of regulations of stock exchanges by Sebi over the periods but the market regulator seems to remain reluctant to rectify the governance system within the exchanges.

"Present system of 50 per cent public representatives is also not very effective as the panel of these names is prepared by broker-directors for Sebi approval," he added.

Gupta said as the brokers have their own quota of 50 per cent representatives on the exchange governing body, it is wrong in principle to allow them to have any influence in the choice of public representative.