The extraordinary general meeting of the Calcutta Stock Exchange (CSE) scheduled for April 4 to decide on the crucial issues of BOLT link-up and trade guarantee fund promises to be a contentious one as several brokers are opposing the proposed tie-up with the Bombay Stock Exchange (BSE). Even the CSE board is sharply divided on the issue and informal discussions among the board members have failed to solve the impasse.
A CSE board member said: The controversy regarding the BOLT link-up shows the short-sightedness of brokers. It is imperative that we change with the times if we have to survive. The need is to join hands and take up the challenge of NSE by providing better service to the investor instead of complaining about reduced business.
Those in favour of the tie-up say the BOLT terminal will in fact increase business for the brokers as local investors who earlier transacted their business with brokers in Mumbai will now route their business through the Calcutta-based broker.
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Competitive quotes via the BOLT terminals also are expected to draw investors.
However, the flip side of the story is that brokers fear business will shift from CSE to BSE if investors prefer to transact on the BOLT terminal. As every broker will not have the cash to add a BOLT terminal, those who do have the link-up will have an undue advantage.
The mandate for BOLT expansion was that BSE will have to sign an agreement with the local bourse before setting up terminals in that region. If the local stock exchange feels threatened by competition and refuses to tie-up with BSE, then BOLT expansion is not possible in that area.