The suggestion made at the meeting of the committee on uniform settlements took Sebi officials present by surprise as they never anticipated BSE and CSE to lend support to rolling settlements considering that this would put a virtual end to badla, an instrument which is an integral part of the two exchanges.

Sebi sources said that stung by the positive response of the stock exchanges, the Sebi officials made a call to chairman DR Mehta now in Japan. Mehta, however, is learnt to have told the officials that no deadline should be set for introduction of rolling settlements or any view taken on the issue at this point oftime.

Hence, the move to introduce rolling settlements was scuttled citing poor infrastructure as the reason and a press statement issued by the regulator merely mentioned that the committee had welcomed the introduction of rolling settlements and the issue would be further discussed by a committee comprising of custodians and DPs.

Prior to leaving for Japan, Mehta had mentioned to The Financial Express that he was keen on rolling settlements but the infrastructure for flow of funds across the country had to be in place before coming out with such a measure. He said that a phased introduction of rolling settlements across select scrips which are already in the demat mode could be considered at a later date.

Sources, however, said that stock exchanges too have realised that rolling settlements are inevitable and hence might as well adopt them now rather than undertake a fresh round of changes in the settlement cycles.

Custodians too pointed out that having a common uniform settlement cycle would meancustodians and depository participants being saddled with huge delivery obligations on a single day. Through rolling settlement, the total delivery volumes would be split through the week. Although Sebi has decided to take up the issue with the DPs and the custodians, it is learnt that the key for rolling settlements is now solely with Mehta. "Most of the market now feels that by the end of the year we should move selectively towards rolling settlements. The ball is now in the Sebi chairman's court," said a committee member.