The Bombay Stock Exchange's (BSE) latest scheme for market-making, known as the Liquidity Enhancement Incentive Programmes (LEIPs), is expected to benefit the retail investors in stock market, Mr Ashish Kumar Chauhan, Deputy Chief Executive Officer (CEO), BSE, said here on Thursday.
“Given the market conditions and stiff competition between stock brokers, the latter are expected to pass on the benefits of LEIPs to their retail investors as well”, he said.
He said he will be meeting brokers in Surat and Rajkot also in this regard.
LEIPs is expected to increase the daily turnover from the existing Rs 100-200 crore in the derivatives to Rs 2,000-3,000 crore, including about 30-40 per cent from Gujarat alone, he said.
Last week, the bourse had launched the scheme to generate more investor interest in derivatives, based on its benchmark Sensex and the underlying 30 stocks. The BSE has earmarked a total of Rs 107 crore for the scheme that will be in force for seven months in two phases.
Pursuant to the Securities and Exchange Board of India (SEBI) granting permission in June this year to the bourses to introduce liquidity enhancement schemes in the equity derivatives segment, the BSE had announced to launch LEIPs-I for one month (September 28-October 25) and LEIPs-II for six months from October 26 this year, with the goal of creating lasting, self-sustaining liquidity in the BSE’s derivatives segment.
The scheme aims at rewarding the derivative members for building a ‘healthy’ order book, and is seen as a step by the exchange to reward entities generating a certain amount of volume in the segment.