Stocks

Bring broking services under essential service across states, else shut operations completely, says CPAI

Suresh P Iyengar Mumbai | Updated on March 24, 2020 Published on March 24, 2020

Only 3 states have declared broking as essential service, says commodity market body chief

The Commodity Participants Association of India (CPAI) has urged the Central government to convince all state governments to classify broking firms as an essential service so that investors in these states are not left in a disadvantageous position.

So far, only three states ― Maharashtra, Gujarat and Rajasthan ― have bought stock broking under essential services.

If the request of classifying broking as essential services cannot be considered feasible, all exchange operations should be closed down till this month end, it said.

In a letter written to the Prime Minister’s Office (PMO), Secretary - Department of Economic Affairs and SEBI, Narinder Wadhwa, President, CPAI, said only three states have declared stock broking as an essential service, the others have not.

Even though the regulator and exchanges have allowed brokers to operate from different locations, it has been an arduous task to move from one place to another, he said.

The situation is in constant flux, and late last evening all of Maharashtra was put under curfew, he added.

Even on Monday, he said the staff of broking entities could barely manage to run operations as they could reach offices with great difficulty.

It is disadvantageous to members and lakh of investors in all those states where it is not classified as essential service as otherwise they are unable to access the market, said Wadhwa.

“We request the Central Government to take up with all the state governments to get broking also classified as an Essential Service as done by three states or else shut the entire market operations,” he said.

Measures such as lockdown, curfew and Section 144 put in place by many state governments to contain the threat to human life have also made commuting increasingly difficult. In the coming days, it might be nearly impossible for the staff to reach their offices.

The risk is perhaps not confined to only financial risk and market risk, but to human life too, which is much bigger than any systemic risk, said CPAI.

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Published on March 24, 2020
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