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NSDL begins baring broker pool a/c data

Rakesh P Sharma & Ashwin J Punnen

The National Securities Depository Ltd has now started providing in-transit position in the pool account of brokers to corporates on a weekly basis.

This move would bring more transparency and the corporate will now be able to constantly track changes in shares lying with the pool account.

Corporates had earlier made a hue and cry over broker pool accounts stating it is being used by raiders to corner shares of companies without revealing their position.

C B Bhave, managing director, NSDL, said, "This move will help companies who apprehend a takeover to know the position of brokers in the company's shares; it will help them take quick action."

In-transit shares are securities purchased by brokers and lying in their depository pool accounts, and which are yet to be transferred to the beneficiary accounts of investors/ buyers.

The in-transit shares issue has been haunting the Securities and Exchange Board of India for some time. The number of shares lying in-transit had ballooned, and in some cases, touched nearly 28 per cent of the paid-up capital of a company.

Some market observers argue that such large in-transit positions are used for manipulating the shares prices of companies.

Sebi had earlier sought information from both the depositories, National Securities Depository Ltd and Central Depository Services (India) Ltd regarding the total number of shares lying in-transit in the clearing member pool accounts of brokers and the list of top ten brokers and their holdings in pool accounts.

Bhave said the move will also facilitate companies in distributing various corporate benefits like dividend an bonus to all concern investors.

It may be recalled recently, Sebi had notified permission to distribute bonus and dividend to the clearing members in respect of the balances in the pool accounts as of the record date/ book closure.

And the clearing member will be responsible for distribution of these corporate benefits to the clients. However, Sebi has clarified that clearing members and intermediaries cannot have voting rights in respect of securities held in the pool account.

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