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No ownership rights for DSE `other' members

Our Bureau

NEW DELHI, Feb. 8

THE Delhi Stock Exchange (DSE) is planning to admit members of other major stock exchanges which have a daily turnover of more than Rs 1,000 crore, namely the National Stock Exchange, Bombay Stock Exchange and Calcutta Stock Exchange, as trading members with limited trading rights. They will, however, not have any ownership rights.

The move is aimed at increasing the bourse's business volumes and geographical reach as the newly admitted trading members can arbitrage trades between DSE and other exchanges and add to the liquidity.

Talking to Business Line, the DSE President, Mr Sudhir Joshi, said that ``the trading members shall have all the trading related rights and obligations and shall be subjected to the same guidelines and provisions applicable to our regular members. But th ey would not have any membership-related rights such as participating in the annual general meeting, getting elected to the board of directors and direct transfer of trading rights.''

According to the plans, the trading members shall have to deposit an interest-free sum of Rs 10 lakh with DSE, which shall be refundable only in the event of the member quitting the scheme or having a shortfall in pay-in. There would also be a lock-in pe riod of a month.

For the Trade Guarantee Fund (TGF), it is being planned to obtain a bank guarantee of Rs 25 lakh per member before extending the TGF cover.

But the exchange is exploring the option of having an

insurance cover equivalent to the amount.

``We are in talks with insurance companies and once we get the necessary approval from our members for amending the memorandum and articles of association, insurance cover, by all possibility, will be forthcoming,'' said Mr Joshi.