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March 29, 2001
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Money > Business Headlines > Report March 29, 2001 |
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Sebi takes first step in corporatisation of boursesBS Markets Bureau The Securities and Exchange Board of India (Sebi) on Wednesday took the first step towards corporatisation and demutualisation of the stock exchanges when it issued a directive to the Bombay Stock Exchange (BSE) saying that no broker would be allowed to act as a director on the bourse's board. The directive was issued even as the BSE was going through the process of electing directors to its board, all of whom are brokers. The decision was taken at a hurriedly convened meeting of the full Sebi board, Wednesday. "This order relates to the current prevailing situation in the exchange and the order will be valid until revoked," Sebi chairman DR Mehta said. The order was issued under Section 11 of the Sebi Act. Though the chairman did not say this in so many words, the directive is likely to be extended to the other bourses. "We have to have uniform laws for all the exchanges," Mehta said. Sebi officials, however, refused to specify when this would be done. "Wait and see," said Mehta. Sebi officials were also not willing to say that the elections to the BSE's board held on Wednesday were null and void. "We are not saying that," Mehta said. "Let the election take place as scheduled since it is according to the BSE by-laws. All we are saying is that brokers cannot be directors on the board." Executive director Dharm ishtha Raval added, "if we decide to revoke the order then the elected members can be directors on the board." The board also decided that in line with the finance minister's announcement earlier this month, rolling settlement would be compulsorily introduced in 261 scrips from July 2, in additional to the 163 scrips which are in the compulsory rolling mode. These additional scrips are those being traded in the BLESS, ALBM and the badla mode. "We have already issued instructions to the exchange to have the necessary infrastructure in place", said Mehta, adding that those unable to comply with the directives would not be allowed to do normal trading but only undertake spot trades. On the hearing in the Harshad Mehta case relating to the price rigging in BPL, Videocon and Sterlite in 1998, Mehta said an ex parte order had been passed and a final order would be passed soon.
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