Sinha's bid to clean up bourses

Sinha's bid to clean up bourses
ENS ECONOMIC BUREAU

NEW DELHI, MARCH 13: In an effort to improve trading practices in the stock markets, the government on Tuesday announced a three point strategy. The strategies include legislative changes to give more power to the regulator Securities and Exchange Board of India (Sebi), extension of rolling settlement to 200 Category "A" stocks, automated lending and borrowing mechanism, introduction of lending and borrowing securities and corporatisation of stock exchanges.

Addressing the Rajya Sabha, the finance minister Yashwant Sinha said that the government would propose legislative changes to give more teeth to Sebi to ensure investors protection. Sinha also warned that none found guilty for bear hammering in the stock markets will be "spared". The finance minister also added that automated lending and borrowing mechanism and borrowing and lending securities would be introduced by July this year.

The three point measure is in addition to the follow up action and investigations already initiated Sebi to deal with bear hammering and price maniplutations.µ Elaborating on the three-point measure, Sinha said corporatisation of stock exchanges by which ownership, management and trading membership would segretaged from each other, would also be undertaken.

Administrative steps would be taken and legislative changes if required in this regard would be proposed accordingly, Sinha said adding extension of rolling settlement to 200 category "A" stocks in modified carry forward scheme would be done by July 1.

"I have been assured by Sebi that there is no systemic risk to the market and there is no danger of a payment crisis," Sinha asserted. As far as bank advances against shares and guarantees to stock brokers by the banking system was concerned, RBI has intimated that it was less than 2 per cent of the total advances as on December, 2000. In this regard, there has been no violation of its prudential norms, he said.µ Tracing the downward trend in the stock markets, soon after the presentation of the budget, Sinha listed the measures already taken by Sebi including banning of former president of BSE Anand Rathi and his broking concerns from undertaking fresh booking business till further orders.

Anand Rathi has also been restrained from acting as director member of the governing board, Sinha said adding in the interest of investors, orderly development of the securities market and proper management of BSE, six memebrs of governing board have been restrained.

Sinha also listed the several measures initiated by Sebi since March 5 when it reviewed the bear hammering. This included investigations agains 20 brokerage entities.

Sinha rules out JPC on stock market crash
New Delhi:Finance minister Yashwant Sinha ruled out a joint parliamentary probe into the stock market crash saying market regulator Sebi was enquring into all aspects and will submit its report by mid-April. Assuring that none found guilty would be spared in the stock market imbroglio, Sinha told the Rajya Sabha that government was committed to demutualise stock exchanges to break any linkages with brokers and stock exchange adminstration. "There should be no impression we are doing anything to protect anybody. We are doing nothing to sweep anything under the carpet," he said in his reply to calling attention motion on volatility of stock markets. He also assured the house if any further investigation by outside agencies were required, government will not hesitate in doing so but at the moment the Sebi is enquiring into the entire gamut. Regarding merger of Global Trust Bank with UTI Bank, Sinha said Sebi has already submitted its interim report to RBI on the issue of share of prices of GTB goingup.