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Inter-connected stock exchange on trial runs

The inter-connected stock exchange promoted by 15 regional stock exchanges today successfully carried out trial runs by executing orders across the participating exchanges through its central trading system at New Bombay.

The exchange proposed to go live with on-line real-time trading of scrips within one month.

Inaugurating the screen-based mock trading, the Securities and Exchange Board of India executive director Pratip Kar said that the stock exchanges in India must upgrade their technology inputs to global standard so that the system could identify the emerging crises in the markets and insulate themselves from them, preventing it from spreading to other sectors of the economy. This needs speedy action and transparency, he said.

''The recent crises in overseas markets did affect our markets in a limited way because our linkages with global markets were relatively weak,'' he observed. In this context, Kar called for rapid technological upgradation in trading, delivery, settlement of shares and financial payment system in order to create confidence among the investors.

The SEBI has initiated a dialogue with the Reserve Bank of India and government authority to allow the stock exchanges to acquire technical facilities from the department of telecommunication for electronic funds transfer at various bank branches in major cities.

Later, addressing a press conference, ISE managing director Joseph Massey said that ISE would start formally enrolling the member brokers, traders and dealers only after getting the final recognition from the SEBI next fortnight.

After completion of members' registration by the end of September, the exchange would go live for real-time trading in equity and shares and later in the next six months to one year, the exchange would introduce products like derivative and forward trading of scrips in dematerialised forms.

The high-tech inter-connected stock exchange which had received in-principle approval from Sebi on October 22 last year, has invested about Rs 750 million so far for installation of technical expertise which included Indigo Technologies and HCL Comnet linking 15-regional stock exchanges and other members through the common infrastructure platform. The exchange proposed to invest a total sum of Rs 150 million.

The exchange's full-time director V Shankar informed that the exchange has set up a committee to design an index comprising about 40 to 60 active scrips with high market capitalisation in the next couple of months. The index will have base year either 1993-94 or 1994-95.

ISE advisor and former executive director of Bombay Stock Exchange M R Mayya said that the ISE would create greater liquidity in the market and would achieve a daily business turnover of Rs 1.5-2 billion in the very first few months.

At present, the total volume of all regional stock exchanges is in the region of around Rs 2.5 billion. Of the 22 stock exchanges in the country, ISE member stock exchanges are Bangalore, Bhubaneswar, Madras, Cochin, Coimbatore, Guwahati, Hyderabad, Jaipur, Ludhiana, Indore, Magadh (Patna), Mangalore, Saurashtra Kutch (Rajkot), Uttar Pradesh (Kanpur) and Vadodara.

UNI