The Hindu Business Line : CSE takes steps to comply with SEBI directives

THE Calcutta Stock Exchange (CSE) has taken a slew of measures to bring its operations in line with the latest stipulations spelled out by the market regulator.

The exchange has referred to a recent SEBI directive with a view to inform members about discontinuation of hand delivery bargains/delivery versus payment.

The regulator, it mentioned, has observed that some investors were still relying on this mechanism for settlement of some transactions.

These, however, are basically bilateral settlement mechanisms and have outlived their purpose.

This is because stock exchanges have been acting as the central counter party and providing trade/settlement guarantee (through the clearing system) and all trades are settled through the depository. Also, this reduces both settlement risks and transaction costs.

The CSE has also listed a few "exceptional circumstances" under which hand delivery bargains/DVP may be permitted. In case these are not present, the exchange, while allowing the trade to be settled through hand delivery bargain on a DVP basis, will impose both margin and penalties.

The CSE has also stated that members who wish to issue electronic contract notes (ECNs) to clients will have to meet certain conditions.

Digitally signed ECNs should be sent only to those who have specifically opted to receive them in an electronic form, may be through a separate letter or in the member-client agreement.

All such contract notes must comply with the provisions of the IT Act, 2000. Also, a member must take all steps to ensure receipt of notification of bounced mails.

The CSE also informed members that, as part of surveillance measures, certain scrips will be transferred to the trade-to-trade segment, while the circuit filter limit will be reduced. This will be effective from October 14.

The counters include financial services stocks such as Invesca Share Securities, Kwality Credit & Leasing, Quest Financial Services, and Shardaraj Tradefin.

Further, a few companies have established connectivity with both depositories (NSDL and CDSL) and their stocks will be traded in the normal demat rolling settlement. These include SBEC Sugar, Snow White Metal Industries, Deevee Commercial, and AI Champdany Industries.

The CSE has also mentioned that SEBI rules indicate that a stock in the compulsory demat list can be sold in the physical form only up to 500 shares per investor.

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