Most brokers, who have multiple memberships, have acquired a membership at a bourse in the form of a corporate entity. However, the stake holding of a broker in each of these corporate entities is different. So, while a broker may be a 70 per cent stakeholder in a National Stock Exchange (NSE) brokerage, he may be holding a mere 15 per cent stake in a corporate entity floated for membership at the Bombay Stock Exchange (BSE).

"Is this member going to be treated as a common member? Logically he is, but technically he is not. Before we go into launching a co-ordinated approach towards common members, the basic issue of what is a common member needs to be tackled," members of the inter-exchange co-ordination gorup which met on Thursday opined.

"There are several brokeragehouses owned by the same family, but the holding of a particular person varies from one outfit to another. Therefore, technically there are very few common members -- actually, there are a large number of brokerage outfits at various stock exchanges with common linkages. But how does one go about seeking action against them as a member at NSE may claim not to be a member at BSE simply because he is not the majority stakeholder in the BSE card," said a source present at the meeting.

A classical example of this was witnessed when NSE directed all its members to furnish a personal guarantee and BSE raised a furore that it would not allow this to happen as there were several common members. At that point of time, it was found that technically only about 70 common members exist. The market estimates had put the figure at close to 300.

The inter-exchange co-ordination group has decided that the sub-group (comprising chiefs of stock exchanges) set up by Sebi, to outline procedures for adopting greaterco-operation on information sharing between exchanges, will also look into defining a commom member. The need for greater co-ordination between exchanges has arisen as it makes no sense if one exchange takes action against a broker, but the other (where he is also a member) fails to do so.

Similarly, with brokers regularly shifting positions from one exchange to another it is almost impossible for an exchange to get to the bottom of a broker's operations unless his records at another exchange are also scrutinised. At present, there is almost no co-operation between exchanges and all such common investigations are necessarily carried out by Sebi. in the past, Sebi had asked stock exchanges to evolve a common set of good and bad delivery norms. However, a lack of co-ordination between exchanges resulted in Sebi being forced to implement these rules.