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Sebi risk management panel meets Wednesday

A risk management panel of the Securities and Exchange Board of India is meeting in Bombay on Wednesday to review market safety measures, a senior official said.

He did not elaborate on the agenda of the meeting.

Sebi had unleashed a series of measures like banning short sales, raising margins and limiting brokers' daily exposure after a stocks slide in early March soon after the release of the Budget widely viewed as market-friendly.

A business newspaper said on Wednesday that the committee may discuss the issue of the ban on short sales, adding however that the ban was unlikely to be lifted.

The benchmark Bombay Stock Exchange index lost 27.4 per cent from its post-budget peak of 4,386.98 on March 1 to a 27-month low of 3,183.77 on April 12. It has gained 10.5 per cent from then to Monday's close of 3,519.16.

The business daily also said the committee would recommend introducing the concept of a unique trading code number, which will help to trace any transaction across stock exchanges.

Another financial daily said the panel would also consider reducing the margins, which were imposed as quick-fix measures to contain a volatile market.

Another Sebi committee recently recommended that the market regulator ban carry forward facilities for shares traded in the rolling settlements, but this measure has to be ratified by the Sebi board.

Carry-forward allows an investor to take on bigger positions than they could otherwise afford, which are squared-off at a later date without any requirement to accept delivery of shares.

The practice has been criticised for enabling excessive speculation in Indian shares, contributing to the huge market decline in March.

Sebi plans to move top 200 shares on the Bombay Stock Exchange to the rolling settlement in July.

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