Several small and medium stock brokers plan to take up the issue of discrimination in granting new membership in the derivative segment with the Securities Exchange Board of India (Sebi).
According to the brokers, more than 60-70 per cent of the derivative members on the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE) are yet to clear their outstanding registration fees.
At present, there are around 300 derivative members, both NSE and BSE combined. Most of these memberships were granted in June 1999, when the Sebi turnover case was pending in Supreme Court. A large number of NSE members are yet to clear their dues as the burden on these members is comparatively higher.
Jitendar Gandhi, a Mumbai-based broker says, "In the current market conditions, Sebi should grant membership in the derivative segment as on-going process and should not link it to registration fees."
"If Sebi wants to fair in its approach then all the terminals of those existing members who have not cleared their registration dues should also be stopped and not just applications of brokers seeking new membership, " said another broker.
Following the Supreme Court verdict in February 2001, the markets regulator acted tough in retrieving dues from brokers and stopped issuing fresh licenses for derivative trading to brokers who were yet to clear their dues.
Sebi is also not clearing any proposal which involves increasing the base capital or changing the constitution of company of from any brokers who have failed to pay the turnover tax. In fact, Sebi has asked stock exchanges to furnish turnover data of members.
With volumes in various derivative products gradually picking up and with no other option, a large number brokers are keen in taking license for trading in derivatives after the ban on deferral products from July 2.
