FISE to set up derivative platform

The exact amount of fund for the body and other nitty gritty will be decided by the next executive meeting of the federation on December 11. To increase the liquidity anddepth in the market, the federation has also agreed in principle to allow members of 21 bourses to trade on terminal of members of another bourse. The respective stock exchange will, however, guarantee transaction of its members in this regard. This type of transactions will be treated at par with that of institutions and clearing settlement will be done by the bourse concerned, Aggarwal, who is also DSE president, said.

Nitty gritty of the system will be worked out later and the federation will approach the Securities and Exchange Board of India for amendment in rules relating to the trade guarantee fund so that the fund can be utilised for the new mechanism as well.

The executive committee will again meet on December 9 to take up this issue. The federation also decided to write to SEBI to allow badla system along with rolling settlement. The body will put forward to the regulator its proposal on badla as practised in the Paris Stock Exchange. It is a 15-day badla and the scrips which are allowed to betraded on carry forward mechanism are not allowed in the cash segment.

The federation strongly feels that the liquid scrips which are currently traded in badla system should be allowed to do so along with the rolling settlement mechanism. The executive committee also took up the issue of lacunae of treating stock exchanges at par with individual broker for the purpose of trading in other bourses. However, nothing concrete emerged on the issue.

FISE executive committee comprises representatives of eight stock exchanges from Delhi, Calcutta, Ahmedabad, Bangalore, Cochin, Jaipur, Bhubaneshwar and kanpur. However, representatives of the last two exchanges did not attend today’s meeting, Aggarwal said. The chiefs of regional stock exchanges met here on Saturday to discuss future strategies that include common platform for derivatives trading and common listing of shares on these bourses. “Top officials of the stock exchanges of Delhi, Ludhiana, Calcutta, Madras, Bangalore among others were present under thecommon forum Federation of Indian Stock Exchanges (FISE) to discuss strategies for the next millennium," chairman of FISE, Ashok Aggarwal told reporters.

The stock exchange officials also discussed trading on the internet and status of rolling settlement, he said. The meeting discussed the need to have a common listing of stocks on all the regional stock exchanges so that there the volume of business and the liquidity improves on the smaller exchanges.

The government has placed a bill to allow derivatives trading in the country by amending Securities Contract Regulation Act (SCRA) and this is expected to come up for discussion during the winter session of Parliament. On DSE’s future plans, he said derivatives trading was very much on the cards on the exchange and consulting major KPMG will make a presentation on this tomorrow.