Technical snag delays settlement at exchanges

Sebi tells TCS, CMC to conduct inquiry.

A technical snag, which hit the inter-depository share settlements on Tuesday, has forced the regulator Securities and Exchange Board of India (Sebi) to ask CMC and Tata Consultancy Services, vendors for Central Depository Services and National Securities Depository respectively, to conduct an inquiry into the matter.

Sebi has also asked system auditor PricewaterhouseCoopers (PwC) to look into the issue.

The move by the regulator comes after both the depositories took a stance that there was no problem at their end.

The inter depository transactions at CDSL and NSDL were hit on Tuesday. The pay-in to clients was made at around 7 pm as against the normal time of 10 am.

Similarly, the pay-outs, which normally take place at 12:30 am, were conducted at around 9 pm on Tuesday night.

Pay-in refers to the time when the brokerages are required to deposit money for their purchases and pay-out is the time when they receive funds for the share sales.

The recurring problem may result in a major disaster and derail the entire share transaction and settlement system in the Indian stock markets, if not addressed immediately, according to brokers.

When contacted, C B Bhave, chairman of NSDL, said, "We had asked for an inquiry into the matter, in December, and had suggested an independent agency such as IIT Powai for conducting inquiries, but this was rejected by CDSL. We then asked CDSL to recommend an agency which could conduct an inquiry into the matter, but did not get any response from them."

"If the problem is not rectified, thee could be a major chaos. Hence, we have asked Sebi to suggest an independent investigative agency, which is also acceptable to CDSL," he said.

V Raut, managing director of CDSL, said that Sebi has asked the vendors and the system auditor to look into the matter and rectify the problem.

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BAD TIMING

The move by the regulator comes after both the depositories took a stance that there was no problem at their end

The inter depository transactions at CDSL and NSDL were hit on Tuesday. The pay-in to clients was made at around 7 pm as against the normal time of 10 am