BSE speeds up settlement
THE Bombay Stock Exchange (BSE) has finally moved towards globalising its operations by adopting a quicker settlement system.
All share settlements in the specified 'A' group will be dealt with on a weekly basis with immediate effect. Until now, settlements had been fortnightly.
Another 450 high-volume shares in the cash 'B' group will be classified into a new 'B1' category, and brought under the weekly settlement system.
'We hope to increase the number of 'B1' group shares to about 800 within the next few weeks,' BSE executive director R.C. Mathur said.
'When that is done, 90 per cent of the daily volumes on the BSE will fall under the weekly settlement system.' The BSE also has announced a series of measures to crack down on the blatant price rigging that has run virtually unchecked until now.
It also will be increasing its threshold for new listings from 50 million rupees (about HK$10.6 million) to 100 million rupees.
This will limit the number of fresh listings on the exchange, moving the weaker stocks to the smaller exchanges.
In addition, the BSE governing board has approached the Securities and Exchange Board of India for discretionary powers on listing of companies.
'If such powers are given to us, they will help us weed out unscrupulous promoters and fly-by-night operators, who have been having a field day until now,' Mr Mathur said.
The moves are clearly intended at taking the National Stock Exchange (NSE) on. Despite the BSE's 120-year history, and its position as the country's premier stock exchange, the NSE, launched in November 1994, consistently has been showing daily volumes in excess of those recorded on the BSE this year.
Foreign institutional investors, returning to Indian bourses over the past couple of months after staying on the sidelines for the second half of last year, also have been asking for quicker settlement with a view to speeding up deliveries and payments.