The number of members opting for modified carryforward trading system at the Bombay Stock Exchange (BSE) has gone up to 171 since it came into effect from November 10. Previously prior to the starting of modified carry trading system at the BSE, 145 broker-members had opted for the old form of badla, thus there has been an increase of 26 members over a period of week. BSE presently has 604 member brokers out of which nearly 500 are active members.
Lack of enthusiasm among the broker community toward the modified carry forward trading system due to factors like weakening market conditions and difficulties involved in practical trading of shares in the badla system are the reasons cited for low member participation in the modified badla trading by the broking community.
The present volatility in the stock market coupled with low volumes are among the reasons which are responsible for many brokers preferring not to jump in for modified carry forward trading system immediately...they would rather adopt a wait and watch policy, said a broker.
According to another broker segregation of daily transaction on basis of whether its for carryforward or for delivery as per the twin track trading system plus the upfront daily margin payment of 10 per cent is also headache which is preventing many brokers from participating in present modified trading system.
According to R.C.Mathur executive director at the BSE, it is too early to judge anything since the modified carry forward trading system is only a week old.
A member of the BSE arbitration committee, also a senior broker says, Another reason why brokers are not interested in this modified carry forward system is because badla financiers are not allowed to keep the shares with them.
The shares are kept in custody of the Bank of India which is the clearing house for the exchange.
The decision of not allowing shares to be given with the badla financier is a right one since the chances of misuse of shares by selling them on other exchange are high, said another broker.
