The Telegraph
Since 1st March, 1999
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Sebi prescribes merger tonic

New Delhi, June 5: The Securities and Exchanges Board of India, the capital market regulator, today said the nation should do away with the small and regional trading bourses currently numbering more than 22.

“We propose two options to the regional bourses — combine and form IndoNext, a single exchange, or merge either with BSE or NSE,” G. . Bajpai, Sebi chairman told newspersons.

Currently, there are 22 regional bourses. But the most closely tracked share barometer is the 30-stock BSE and the NSE.

Bajpai also said: “We have been improving the integrity of the stock market after the slew of initiatives taken by the regulator and stock exchanges.”

Last year, the government had amended the Sebi Act of 1992 to arm it with powers which would allow it to search and seize books, registers and documents of intermediaries or any person associated with the securities market. Sebi can issue orders to cease and desist to any person who is likely to violate the provisions of the Act.

“The fundamentals of the Indian economy and companies are strong which is reflected in the rise of the sensex,” he said.

The BSE today ended up 1.42 per cent at 3262.20 points, its best close since March 3 and beating its previous three-month closing high struck on Wednesday.

The index has now risen about 11.6 per cent from a six-month low hit in late April but is down 3.4 per cent in 2003.

“The introduction of the T+2 settlement of shares systems has ensured that no body is able to build up artificially huge position in the market,” Bajpai said.

The finance secretary refused to reveal the government’s stand on equity return by banks. “There is no need for me to take a policy decision in front of the media. We will inform you when it is decided,” S. Narayan said.

Banking stocks fell marginally and analysts said stocks would stay volatile until government announces whether it would buy back equity from banks wanting to return part of equity capital at a premium or at a par.

Meanwhile, the Federation of Indian Stock Exchanges today proposed a slew of measures, including weekly settlement, suspension of book building, hike in the capital base of companies and public holding, for making the sparsely traded stocks more attractive. In its report, FISE president Vijay Bhushan stressed on the “market making” process to boost trading volumes of sparsely traded stocks.

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