"Rolling settlement is part of our reform agenda. Once the Continuous Net Settlement (CNS) gets going, we will watch the situation. We will take a practical view of extending more scrips on the rolling mode," Sebi chairman DR Mehta said.

He said that the CNS system is likely to be introduced by the end of this month. The National Stock Exchange (NSE) and others were in the process of putting in place the requisite software.

Admitting that liquidity in the market plummeted after the introduction of the Automated Lending Borrowing Mechanism (ALBM) and the Borrowing and Lending Securities Scheme (BLESS), Mr Mehta said, "I think both the systems are working well. The volumes are surging now."

Sebi had directed 163 scrips under compulsory rolling mode in the first tranche. However, the objective was to bring in more scrips under rolling mode. "It is voluntary for all scrips," Mr Mehta said, indicating that the regulator was in favour of taking a conscious move towards rolling settlement after watching the market.