Rolling settlement from Jan 10

MUMBAI, November 30: Rolling settlement is scheduled to commence in Indian bourses effective from January 10 next with Bombay Stock Excha...

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MUMBAI, November 30: Rolling settlement is scheduled to commence in Indian bourses effective from January 10 next with Bombay Stock Exchange (BSE) being the first to introduce it.

The National Stock Exchange (NSE) would introduce it two days later while the other exchanges would follow thereafter. Securities and Exchange Board of India (SEBI) in a meeting today with all stock exchange representatives and other market players decided to kick off the rolling settlement with 10 scrips which are perceived to have sufficient liquidity.

The scrips selected should have a daily transactions turnover of Rs 1 crore on an average, SEBI chief D R Mehta told reporters here after the meeting. However, these scrips would not have badla (carry forward) trading done in them and would be compulsorily in demat form, he said.

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The ten selected scrips are – BSL Software, ITI Corp Securities, Cybertech Systems, Hitech Drilling, Maars Software, Morepen Laboratories, Adhikari Brothers, Tata Infotech, Visual Software and Lupin Laboratories

Issues such as margins on additional volatility, whether to impose circuit breakers or not would be decided later, Mehta said adding that there was also the possibility of doing away with margins altogether.

LOCK-IN FOR NON-PROMOTERS: Non-promoters who have been allotted shares preferentially in an initial public offerings (IPOs) can now offload their shares only after the expiry of six months from the date of issue.

Venture capital funds and employees are, however, exempt from this proviso, officials of Sebi said here today.

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According to Sebi officials, shares allotted preferentially at a differential price to non-promoters such as mutual funds, banks and others falling in this category would have their shares locked in for a period of six months from the issue date. During this lock in period the market is expected to settle down as well as the shares from the IPO would also have stabilised.

The decision on preferential allotments was taken at a meeting the SEBI had with investors’ forums, investment bankers and other market participants here today.

Senior executive director O P Gahrotra explained that this was to prevent fly by night operators or speculators from putting in money into IPOs and then exiting from it to make a fast buck.

Venture capitalists have been excluded as they have to be encouraged, Gahrotra said adding they should not have their funds locked an for a long period, while so far as employees are concerned they should be able to take advantage of employee stock option schemes.