JPC intervention in rogue trades sought

Yagnesh Kansara

Mumbai, July 17: Brokers of the The Stock Exchange, Mumbai (BSE) have sought the Joint Parliamentary Committee’s (JPC) intervention in the case of suspension of two BSE brokers for punching of ACC orders at unrealistic prices.

In a representation to the JPC, the BSE Broker’s Forum (BBF) has demanded that the decision of suspension of the two brokers be reviewed and the reform process being carried out in the capital markets be clearly outlined and followed across all sectors of the economy.

BBF termed the decision taken by the exchange authorities as the knee-jerk reaction, which could have been avoided. It also expressed the view that such events could have been foreseen and corrective action should have been taken in advance.

The Forum further stated that when electronic trading was first introduced in the BSE during 1995-96, 400 cases of punching errors were reported in the first month itself. The two members, who wrongly punched the ACC order — Angel Securities and Mahesh Kothari — were suspended by the Disciplinary Action Committee (DAC) of the exchange for three months from the period starting July 9 till October 8.

BBF in its presentation to the JPC last week said that from July 2, 2001 permitting totally free price-entry in computer systems, without any price and quantity validation, caused chaos. Investors and brokers suffered heavy losses due to clerical punching errors.