The BSE has decided to give exclusive rights to market-makers to deal in these stocks, to make it a success. The response to the BSE's new plan is encouraging and more than 20 member-brokers have already evinced interest to act as market-makers in these infrequently traded stocks.

That the response of these members is overwhelming can be gauged from the fact that every interested member has shown willingness to the exchange authorities to offer two-way quotes in at least 150 to 200 stocks each.

As part of a new initiative, BSE president Anand Rathi has now set his eyes on reviving investor interest in the B2 group stocks. Speaking to The Financial Express, Mr Rathi said, "The next item which requires urgent attention on our agenda is to revive investor interest in the illiquid stocks of B2 group. We have decided to invite market-making in these stocks. The member who agrees to act as market-maker will give two-way quotes and he will be given the exclusive right to trade in these stocks, as the exchange will debar every member other than the market-maker to offer quotes."

The BSE has about 8,700 stocks listed on the exchange. Of these, 141 stocks are listed on the most liquid and volatile segment of the exchange - the "A" group. In the cash segment, the B1 group has about 1,083 stocks, `B2' group lists 3,734 stocks. It has transferred about 1,500 stocks to the `Z' group. After the reshuffle effected in January last, the size of the B1 group has come down to 762 and the size of the B2 group has swelled to over 4,000 stocks.

The exchange has plans to begin market-making and kick off trading in the wholesale debt market simultaneously in the first fortnight of March. The only hitch in the plan is securing the permission of the Reserve Bank of India (RBI) for debt trading. The central bank is expected to clear debt trading by the first week of March, Mr Rathi said.

He also clarified that market-making in illiquid stocks will be completely screen-based and the past practice of allowing simultaneous trading will not be permitted. This is being done, so that members who act as market-makers get enough leverage to succeed.

Broking circles feel that the exchange's decision to offer exclusive market-making rights is indeed a well thought-out plan.

This is because the investors would welcome the measure and it would also successfully stem the exodus of scores of jobbers who have turned to the Over The Counter Exchange of India (OTCEI).

Many brokers feel that BSE's chief concern is to stem the exodus of jobbers to the OTCEI, and that the exchange has deviced the new format of market-making and added the exclusivity feature precisely for that purpose.