The Delhi Stock Exchange (DSE) is considering the introduction of trading in individual stock futures on the bourse following the Securities and Exchange Board of India's (Sebi) decision to allow it in 31 scrips.
It is simultaneously pushing for an interim arrangement wherein DSE members can trade on the Bombay Stock Exchange (BSE) pending consolidation of the two bourses.
Vijay Bhushan, president, DSE, soon after taking charge on the bourse had said that once Sebi approves the proposal to introduce stock futures, the Delhi bourse would set in place the requisite risk containment measures. He was in Mumbai on Friday to meet senior Sebi officials and executives of BSE.
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Sources, however, said that it would take a while before the software and hardware systems with requisite risk containment measures are put in place at the exchange. DSE would then seek Sebi clearance for commencement of stock futures trading.
Meanwhile, DSE has decided to drop its earlier plan of floating a subsidiary to acquire trading rights for its members on the BSE. While the bourse planned to pump in around Rs 4-5 crore in the subsidiary from its reserves, Sebi regulations prohibited it. As per the regulator, the members would have to contribute towards the capital of any new subsidiary being planned.
Bhushan said he would also push for an arrangement with BSE which allows DSE members to trade on the BSE in the interim period when the modalities for 100 per cent acquisition of DSE by BSE are ironed out.
In his meeting with BSE functionaries on Friday, an in-principle decision has been taken under which BSE would establish connectivity at the DSE office facilitating trading by DSE members on the BSE as sub-brokers.
Former DSE president Sudhir Joshi, who had set the ball rolling for the consolidation process, had at DSE's annual general meeting last week enumerated the objections which the Delhi bourse members had regarding the merger.
The BSE proposal said that DSE members would be permitted to avail of the one-time concession as well as a discounted price for membership on the BSE within three months from the date specified by BSE.
DSE members had, however, sought a three-year timeframe. The proposal also noted that DSE members would have to meet the eligibility criteria and apply for BSE trading membership. DSE has suggested that its members be automatically registered as members of BSE.
While BSE said that it would buy 100 per cent shares on the DSE from the members for a consideration of Re 1 each, DSE said the proposal should sail through even if 90 per cent shares of DSE are bought by BSE. Further, the consideration of Re 1 each was only notional and any agreed price could be put if there were no legal hassles, DSE said.
DSE has also objected to the BSE board's proposal that the assignee to the trading membership on the Delhi bourse would not be eligible for the discounted price. The Delhi bourse members wanted the one-time discount be allowed to the assignees also.