Calcutta, July 19: Inter-connected Stock Exchange of India Ltd (ISE) has decided to give each of its 650-odd members an additional trading right for free.
Members could use the second trading right themselves to expand their businesses or sell it off to people who want to join the exchange, said ISE chairman M. R. Mayya.
ISE has also decided to allot 15 trading rights for free to each of the 14 stock exchanges that promoted it in 1999. The exchanges, in turn, are expected to sell these trading rights to brokers. The point of this largesse, Mayya explained, was to increase ISE’s reach.
Though ISE was a non-starter, its subsidiary, ISE Securities and Services Ltd (ISS), which is a member of the Bombay and National stock exchanges, has been logging transactions of over Rs 100 crore.
ISS is a member of both the cash and derivative segments of the National Stock Exchange, and the cash segment of the Bombay Stock Exchange.
Of the Rs 100-odd crore daily turnover of the bourse, 25 per cent comes from the derivative segment. Going forward, ISS expects its turnover from derivatives to grow rapidly.
ISE is, at present, going through the process of converting itself into a corporate body. “It’s already demutualised, but in line with Sebi recommendations, we will prepare a scheme for conversion of ISE into a company by the end of July,” Mayya added.
To turn itself into a company, ISE will convert the Rs 9.2 crore that the 14 bourses paid towards its foundation, into shares. Going forward, it will also reconstitute its governing board.
Twelve of the fourteen exchanges that promoted ISE paid Rs 70 lakh each towards foundation; the other two paid Rs 40 lakh each. ISE raised Rs 20 crore from brokers who joined as members.