Mumbai, Feb 1: The government is expected to issue the formal notification on corporate governance norms within a week. The corporate governance norms, both mandatory and non-mandatory, are to be implemented through the listing agreement bringing them under the ambit of the department of company affairs. Within the same period derivatives trading is also expected to get the formal nod from the government, Securities and Exchange Board of India chairman D R Mehta said today.At its last board meeting, the Sebi board had approved all the recommendations made by the Kumaramangalam Committee on corporate governance.For companies which are seeking listing, the norms will be applicable with immediate effect. Companies coming under BSE's A group, and those in the S&P CNX Nifty, have to report compliance by the end of the next fiscal.
Derivatives trading is also set to start on the bourses and it requires only the formal notification before both the NSE and BSE are expected to commence trading in futures and other equity derivatives.
Meanwhile the first Internet trade was officially kicked off today through Geojit Securities' website with an order for 100 shares of Reliance at a price of Rs 334 each being punched in by Mehta.
The Sebi chairman pointed out that safety requirements were considerable even under the present order routing system and Sebi and the stock exchanges were working towards it. The government has yet to put cyber laws for commercial transactions in place. Mehta said that they should undertake transactions with whatever systems were in place, "we cannot keep waiting for the perfect system to take shape".
Sebi had yesterday issued the formal notification on Net trading to the exchanges. Those brokers providing Internet-based facility on their own have to have a minimum net worth of Rs 50 lakh.
Geojit's Internet module is based on the software developed by NSE.IT, the IT subsidiary floated by NSE. The brokerage company's website (www.geojitsecurities.com) offers an e-depository module which allows investors to keep track of their portfolios.
C B Bhave of National Securities Depository Ltd said that more bandwidth was required for on-line trades to take place. Under on line trade the client's account will be directly debited with the shares being credited to the broker's pool account. He added that once the banking interface with the Internet develops the risk currently borne by the brokers will be reduced as they would be able to check with the clients' banks on their solvency.Geojit is a member of both BSE and NSE.
Copyright © 2000 Indian Express Newspapers (Bombay) Ltd.