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Sebi may outline roadmap to shorter settlement

BS Markets Bureau

The blueprint of the Securities and Exchange Board of India's agenda to restore investor confidence will be placed before its board on Thursday.

This will be the first Sebi board meeting to be held under the chairmanship of G N Bajpai.

While the agenda has been kept under wraps, one of the items scheduled to be discussed at the meeting is to gradually move to a T+1 rolling settlement regime. This month the stock markets moved to a T+3 regime.

There are very few countries in the world which follow a T+1 system and even the United States, which has one of the most advanced capital markets, has postponed its implementation.

The board is expected to set out a roadmap for gradually moving into a shorter settlement period. This will include gauging the preparedness of the stock exchanges as well as the depositories.

At present, online inter-depository transfers are not possible and the depositories still follow the batch-processing method.

Reserve Bank of India's initiatives in introducing real time gross settlement system and electronic transfer of funds can make this possible.

Demutualisation of bourses is another pending item on the agenda, which the board is scheduled to discuss. Closely associated with this is the composition of the stock exchange boards.

The Sebi board will review whether all the stock exchanges have complied with its regulations in suitably amending their bye-laws. It had already sent instructions to stock exchanges that brokers can no longer occupy board berths.

Disclosure norms for various industry segments is also expected to be discussed. Sources said the chairman had been talking about better disclosures standards, which would vary with each sector.

Disclosure standards could also vary with the type of instruments held.

The launch of the online information system whereby information on corporates and the markets would be available and the modalities for launching it will also be discussed.

Sebi is planning to work closely with the Institute of Chartered Accountants of India in evolving accounting norms for stock exchanges in a corporatised environment. This will also be under discussion by the board, sources said.

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