It is learnt that Sebi recently held talks with National Securities Depository Ltd (NSDL) chief CB Bhave in this regard and discussed the issue on uniform settlements.

An action plan has been drawn out. Sebi has decided to hold a meeting in the third week of January to ascertain the success of the move to push scrips into the manadatory demat trading mode. By this time, 12 scrips would have seen 100 per cent settlement in demat form for about two settlements and bottlenecks if any would be out in the open by this time.

This meeting will also determine the future course of action for mandatory demat trading. "If all goes well we will expand the list of securities where only demat trading will be carried out. At this point of time we will also be taking a look at the timetable for dematerialisation and see when can we introduce rolling settlements," said Sebi chairman DR Mehta. He declined to peg a date but sources close to him told The Financial Express that he is keen to get rolling settlements kick-started by June next year.

Meanwhile, at the meeting with stock exchanges under the aegis of the MR Mayya committee on uniform settlements about five stock exchanges urged the regulator to bring in rolling settlements into the market at the earliest.

"They told us that they want rolling settlements but we want to be very sure about the readiness of the market before embarking on such a move", said Mehta.

Mehta and Bhave both are, however, of the opinion that the market should be allowed to absorb the impact of mandatory demat trading before another major reform is thrust upon the market and it is found napping.

"We should not end up confusing investors. They are, in any case, going to be grappling with the depository system and if we also simultaneously bring in rolling settlements, which technically is now possible, we might just be putting too much of load on the foundation of the markets," said a Sebi source.

"The plan is to introduce rolling settlements by June as by this time we would have about 100 scrips in the mandatory demat trading list. These would account for a major part of the market so we would end up covering almost the entire market. This would be the right time to come out with rolling settlements," said the source.

It is not clear whether this internal deadline set by Sebi would go down well with the finance ministry which has, over the past year, been putting pressure on Sebi to bring in this reform at the earliest. The ministry feels that this move would bring Indian markets on par with their international counterparts. On the other hand, it would graetly reduce volatility and bring the market closer to a cash market.