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: DR Mehta can legitimately be proud of his tenure as Sebi chief for seven years as he has transformed the Indian stock market into a highly developed and sophisticated market not just on par with the developed markets of the world but ahead of some of them. Screen-based trading has been ushered into India in a short span of about five years while the New York Stock Exchange still has floor-based trading. Dematerialisation of securities has made tremendous progress in the last six years with shares worth over Rs 4.22 trillion accounting for about 70 per cent of market capitalisation being in demat form.
With about four million investor accounts and almost 100 per cent of deliveries being settled in demat form, India is cited as a model in dematerialisation of securities for other countries. The US still has the immobilisation system with securities lodged in depositories being settled in physical form. We started rolling settlements on a T+5 basis in July 2001 and switched over to T+3 rolling settlements on April 1, 2002. The UK began with the rolling settlement in 1994 on a T+10 basis and took a long time to shift to T+3.
Trading in futures and options, which we have today, not only on stock indices, but also on individual stocks is a tremendous success with the turnover often accounting for nearly 50 per cent of the turnover in the cash segment in NSE. Futures trading in individual stocks has been a success only in Spain.
The US is still grappling with regulatory problems to start trading in individual stocks. We have also made tremendous progress in matters like disclosure requirements, accounting standards, takeover code, corporate governance, etc. Mr Mehta has deservedly carved out a place for himself in the history of capital market of the country.
To attribute all these achievements to the span of seven years coinciding with Mr Mehta’s tenure is, however, not fair. Reforms of stock exchanges, which start with the birth of stock exchanges, are a perennial process. Contributions made by late Padmabhushan KRP Shroff, who was the president of the Bombay Stock Exchange (BSE) for 13 long years till March 1965, and his illustrious successor, PJ Jeejeebhoy, who was the chairman of the Exchange from April 1965 till his demise on February 9, 1982, are unparalleled. While the cornerstone of ethical standards in stock exchange administration was laid down by Mr Shroff, Mr Jeejeebhoy...
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