To start with, MSE would introduce rolling settlement in about 20 to 30 scrips that are presently available in the demat mode. It alsoplans to continue with the existing weekly settlement system for some more time till the new system is fully in place. In order to ensure that speculation is not killed on account of rolling settlement the exchange will be introducing badla, Raamassubramanian added.

MSE is banking on the rolling settlement and badla for its survival. The volumes of this once premier stock exchange continues to be poor despite efforts by the exchange management to induce confidence in the minds of the brokers as well as the investors. In less than a year, it had set up a clearing house, got insurance cover for its members, introduced settlement guarantee fund and also commenced demat trading. These measures, but for the occasional spurt in volumes, did not yield expected results.

MSE's decision comes at a time when the Securities and Exchange Board of India (Sebi) chairman DR Mehta has advised caution in moving towards a rolling settlement citing poor infrastructure. In fact, the Sebi chief had not accorded clearance tothe move by BSE, NSE and the Calcutta Stock Exchange (CSE) for introducing rolling settlement in their respective exchanges from November 1, 1999. He reportedly wanted to ensure that custodians and depository participants are adequately geared to take the work load of a daily settlement.

MSE officials, however, feel that it will not face any problem in getting the Sebi nod as the volumes are very low and Mehta's concern applies only to exchanges with huge volumes. Moreover, the market watchdog is not in-principle against the introduction of rolling settlements, they added.