BSE to add 100 deposit-based members

After selling 27 membership cards at Rs 65 lakh each, the Bombay Stock Exchange's (BSE) governing board at an extraordinary general meeting yesterday decided to sell an additional 100 deposit-based membership cards.

It has also decided to issue 20 ownership-based cards at the base value of around Rs 95 lakh.

BSE insiders say it is the first time in the history of the exchange that it is introducing deposit-based memberships and the move is considered a step towards the corporatisation of the exchange.

Said a BSE source, "The issue of new deposit-based membership was on the top of the agenda of the stock exchange's extraordinary general meeting and it has been unanimously approved by the members."

The source said the exchange planned to introduce an additional 100 memberships, but they all would be deposit based, with only trading rights but no voting rights. Deposit-based members will also have a three year lock-in-period.

"The general body of the members of the exchange unanimously recommended creating a new class of deposit-based membership (trading membership) in the various segments of the exchange with only trading rights but without any ownership right," the BSE source said.

The National Stock Exchange (NSE) currently has a deposit-based membership model.

Deposit-based membership will be for both the cash and derivatives segments and will be issued at a refundable deposit of Rs 75 lakh of which Rs 10 lakh will be a cash deposit and an another Rs 10 lakh will be the contribution to the trade guarantee fund.

A member in the cash segment will also be eligible to do business in the debt segment, subject to meeting the net worth requirements, payment of annual subscription and so on.

With the introduction of 100 new deposit members, the total number of brokers will go up to 850 on the BSE.