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Sebi panel urges carry-forward ban in some shares

A committee set up by the Securities and Exchange Board of India has proposed abolishing carry-forward facilities extended by domestic bourses to shares traded under rolling settlement, the market regulator said on Thursday.

The committee gave no reason for its recommendations, but the market regulator has been under pressure to clamp down on excessive speculation in the markets.

SEBI already plans to move the top 200 shares on the Bombay Stock Exchange to the rolling settlement mode in July and dealers are fearful that volumes will fall in the absence of any carry forward facility.

The panel has also recommended that the stock exchanges introduce options and futures in select shares in order to give investors the option to hedge, a need being currently met by these carry-forward facilities, Sebi said.

It suggested these measures be applicable from July 2.

Sebi said it will discuss these proposals at its next board meeting but did not specify a date.

The market regulator has come under fire recently over charges of inaction after a series of scandals and insider trading allegations triggered a stock market plunge.

The benchmark Bombay index plunged to a 27-month intra-day low, falling over 29 per cent from the highs struck after shares rallied in response to a market-friendly and reformist federal Budget unveiled in end-February.

Sebi has already imposed a short-selling ban, increased margins and limited broker exposures in a bid to contain market volatility.

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