SEBI in a dilemma over rolling mode scrips

NetScribes/Janaki Krishnan

With scrips in the carry-forward segment set to go into the rolling settlement mode in November, the Securities and Exchange Board of India is faced with a dilemma: while including these 'A' group scrips of the Bombay Stock Exchange in rolling settlement, should it start at the bottom of the volumes table or at the top.

A total of 140 scrips in the BSE 'A' group and 160 scrips in NSE's automated borrowing and lending mechanism (ALBM) are to be shifted to rolling settlement. Considering that many scrips in the two lists overlap, the two exchanges will together see a total of 170 scrips going into rolling format.

The scrips will be moved to the rolling mode in phases, say BSE officials. The plan is to first put 10 carry-forward stocks into rolling settlement and follow up the move with others so that the market gets enough time to familiarise itself with the changed manner of delivery and settlement.

The stock exchanges have been directed to consider the liquidity of scrips while deciding their eligibility for rolling settlement. SEBI's problem is figuring out whether to start off with the scrips with the lowest turnover or those with the highest turnover.

If it starts with the top traded scrips, BSE officials say, the first round will certainly include HFCL, Global TeleSytems, Satyam Computer, Zee Telefilms, Silverline Technologies, Infosys Technologies, Wipro, Reliance Industries, SSI and Pentamedia Graphics.

If the exchange decides to kick off the new trading system with scrips at the bottom of the heap, then names such as Indian Hotels, Indian Oil, Sesa Goa and Voltas are likely to figure on the list.

For obvious reasons, both SEBI and the exchanges are reluctant to reveal which scrips will finally make it to the first 10 . "We do not want the market to start speculating and dump stocks," says a top BSE official.

While the market is expecting the top 10 traded scrips to come under rolling settlement, SEBI and the exchanges could well spring a surprise by starting at the bottom or even the middle.

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