At least 80 per cent of total trading is cornered by the leading stockexchanges like BSE and NSE. What the future holds for over 20 regional stockexchanges?
They have a future of their own. Today, there are 7,000 to 8,000 securitieslisted in these 20 RSEs. The expertise of these stock exchanges is requiredto be further utilised to serve investor interests better. There is no doubtthat NSE and BSE are leading exchanges in India and they have 900 and 300members respectively. But the reach of their members is limited. Anotherimportant thing is, out of 10,000 stocks listed, only 1,000 scrips are beingtraded on a daily basis. If you apply the yardstick of a minimum of fivetrades or a minimum volumes worth Rs 5 lakh per day, the number will comedown to a mere 100. We have to give a boost to the regionally listedsecurities. One of the aims of ISE is to generate liquidity in theregionally listed stocks.

What are your views on rolling settlement and its significance for Indiancapital markets?
The concept of rolling settlement is a good one. However, the rollingsettlement can result in a tremendous decrease in liquidity. Instead of adaily badla or ALBM (automated lending and borrowing mechanism), I wouldstrongly recommend two separate settlements - rolling settlement withoutbadla and a weekly or preferably fortnightly trading cycle with badlafacility. This will generate adequate liquidity in both the settlements.

For instance, Brussels has a similar system and Paris had the same systemtill recently. Daily badla is quite complex. Besides, the badla market willget fragmented with one, two, three, four, and five days badla, which willnot only render the market illiquid, but also lead to volatility in badlarates.

Is the Indian capital market safe? What is your opinion ?
The Indian capital market with all the checks and balances evolved by theSecurities and Exchange Board of India and stock exchanges are absolutelysafe. The high decree of concentration of trading in a few scrips with about10 scrips accounting for 80 per cent of trading poses no danger to themarket. In fact, trading in these scrips turned out to be extremelycompetitive. However, what we need to focus on, is to ensure liquidity inall the listed stocks.

NSE is already a public limited company and BSE too is planning to gocorporate. Is it appropriate for the stock exchanges to becomeprofit-oriented?
The stock exchanges constitute a vital segment of the regulatory framework.In fact, the global mantra is that they should develop as self-regulatorybodies. Turning exchanges into profit centres would defeat the purpose.De-mutualisation of stock exchanges is not a healthy development.

How is ISE different from other stock exchanges ?
ISE is a unique organisation. Its members are registered stock exchanges andtraders. It has set up a state-of-the-art trading, clearing and settlementsystems with a minimum cost. Dealership of ISE, too, is available on apayment of an amount of just Rs 5 lakh. ISE has taken only Rs 5,000 asadministration fee from the members of the regional stock exchanges, thus,facilitating enrollment of members with small networth.