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Journalism of Courage
CALCUTTA, May 31: The memorandum of understanding between Bombay Stock Exchange and Calcutta Stock Exchange for expansion of trading network was signed here today by BSE president, M G Damani, and CSE president, Dinesh Singhania. Present as witnesses were Ramesh Damani, director, BSE, and Sevantilal Shah, CSE member.
Stock exchange sources said that business will commence hopefully in a month from now once the necessary changes in byelaws of the exchanges are approved. These changes would relate to permissible brokerage, issue of contract notes by counter parties and settlement of disputes between member and member.
Damani said that similar MoUs are likely to be signed in the near future with the Pune, Mangalore and Coimbatore stock exchanges. BSE incidentally signed its first MoU with Ahmedabad even before its trade guarantee fund was cleared by Sebi early this year.
The MoU in a way is a reaffirmation of the decade-old partnership between members of the two exchanges. Damani said that the future would see more alliances among exchanges for mutual benefit and improvement in investor service standards.
In fact, the preamble to the MoU clearly states: “The relationship between BSE and CSE is more than a century old. In the past, this relationship has proved to be very beneficial to the investors, as well as members of both the exchanges as many of them have enjoyed very fruitful mutual business relationship on their own behalf, as well as on behalf of their investor clients.”
CSE president, Dinesh Singhania, said the partnership with BSE would be in the interest of CSE in the long run as members would have instant access to the Mumbai stock market. He added that the trade guarantee fund proposal would be submitted to Sebi in a week’s time and expected clearance within a fortnight from submission.
Under the terms of the agreement, members of BSE will firm up a working arrangement with their CSE counterpart and vice versa in the same manner as such individual arrangements have been continuing over the years. The total brokerage charged to the investors shall not exceed 2.5 % of the traded price, which is the maximum permissible under the rules and byelaws of the exchanges.
Each stock exchange will deal with its own member only and a member shall be accountable to the exchange of which he is a member. Both stock exchanges will ensure that investor grievances, including arbitration matters, are resolved at their respective ends, promptly.
Contract notes to clients of CSE member will be issued by him only. The contract note between members of both the exchanges will show transaction price and brokerage separately.
