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June 23, 2001
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Money > Business Headlines > Report June 23, 2001 |
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'Badla will never return'BS Markets Bureau The government is committed to reforms in the capital market and there will be no going back to the age-old carry-forward system, Jaimani Bhagwati, joint secretary (capital markets) in the Union finance ministry, said. Speaking at the fifth annual Invest India Economic Foundation Conference, Bhagwati said various participants in the capital market should approach regulatory bodies with suggestions for a seamless transition. "We are introducing changes to imbibe international market practices in the domestic capital markets and rest of the conditions should also be in tune with time", he said. "There would not be any slippage in the reforms announced in March, including corporatisation of exchanges and empowering the Securities and Exchange Board of India through legislative changes," Bhagwati added. He urged the broking community to have self-regulation at the broker-dealer level. Bhagwati said the restrictions on short sales by institutional investors need be reviewed in the light of capital market reforms. The blanket ban on short sales may be good, may be not, he opined. The reforms, including rolling settlement and individual stock options, would trigger mergers and acquisitions among the broking and investment firms, Bhagwati said. "The consolidation of the industry may be a good idea," he added. Clearing Corporation of India chairman and former National Stock Exchange managing director R H Patil was of the view that over-leveraged trading positions had triggered the markets' crisis in February-March 2001. Some of the exchanges had not collected adequate margins during the turbulent period, Patil said. The derivatives for index were not taken seriously and their share in trading volumes was less than one per cent, he added. The rolling settlement and individual scrip-based options would help improve trading, he said. Patil said the mechanism of lending and borrowing of securities and continuous netting system need be introduced in rolling settlement, in order to create liquidity in the system. Or else, the volumes would dry up significantly, he added. Powered by YOU MAY ALSO WANT TO READ:
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