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May 4, 2001
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Money > Business Headlines > Report May 4, 2001 |
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CSE sub-panel to take stock, post-Sebi probeBS Bureau The management sub-committee and the Calcutta Stock Exchange board has decided to meet again this Saturday to take stock of the situation at the bourse after the arrival of a team of fresh investigators from the Securities and Exchange Board of India to look into the factors responsible for the payment shortfall last month. This would be the second meeting of the management sub-committee in a week and clearly reflects how seriously Sebi views the crisis on the bourse, said sources on the panel. The despatch of the investigators' team by Sebi also indicates that the market regulator is not satisfied with the report prepared by CSE and wants a detailed report and quick action to punish those responsible for the payment crisis that brought the exchange to its knees. "The greed of three brokers and the collusion of some others have led to a situation where the future of the entire broking community in the city has been endangered and this cannot be tolerated", said a member of the management sub-committee. Sebi sources said an action taken report was required to clean up the bourse which is still grappling with a payment crisis even as the July 2 deadline for corporatisation of bourses drew close. Without revealing specific agenda, top CSE officials said Saturday's meeting would centre around recovery of nearly Rs 1 billion from 10 defaulting members. The recovery was required to put the bourse back on the rails, they added. "The board would also decide in initiating criminal proceedings for attachment of the defaulting brokers' property to recover their outstanding," they added. CSE has already began criminal proceedings against the erring brokers for issue of cheques for Rs 530 million which bounced. The board, it is learnt, will also try to reach at a solution to rebuild the settlement guarantee fund which was eroded during the crisis. The CSE management had taken recourse to the fund to meet the payment shortfall. Later, nearly Rs 100 million was infused into the fund from selling of some shares. In an effort to rebuild SGF, CSE has doubled turnover tax to 0.05 per cent of the volume of trade executed by a member. The surplus amount of the new rate, which will be effected from tomorrow, will be credited to SGF. However, senior CSE members took a different line, underplaying the importance of rebuilding SGF. A senior member of CSE said: "The need of the hour is not to rebuild SGF but to prepare for futures and options trading. Going by the indication that Sebi might ban badla from July, CSE needs to prepare itself for futures and options trading," he added. But, he admitted most CSE members were not eligible for the clearing-house membership that was a crucial requirement for trading in futures and options, thereby making introduction of the system in the bourse difficult. A clearing-house member requires to have a net worth of Rs 200 million. He added that CSE should also look into installation of specialised software for the futures and options trading. "The crucial task before CSE is that it will have to prepare itself for the trading in only two months. Considering the prevailing condition of the bourse, two months is not enough to do all these," he added. Powered by YOU MAY ALSO WANT TO READ:
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