MUMBAI, May 10: The governing board of the Bombay Stock Exchange (BSE) today decided to make its Rs 172.5-crore trade guarantee fund operational from May 12. The exchange had received the final SEBI approval on May 9, 1997. The first ever SEBI-approved trade guarantee fund which will guarantee the settlement of bona fide transactions of BSE members and ensure timely completion of settlements of contracts, will have an initial corpus of Rs 172.5-crore.

Highlighting the break-up figure of the fund, BSE president M G Damani stated that the exchange will contribute Rs 60-crore earmarked out of the members contribution lying with the exchange in cash. The fund also includes an amount of Rs 55-crore as the base capital lying with exchange in form of cash, fixed deposits and shares.

Further, another sum of Rs 55 crore will be received in the form of bank guarantee at the rate of Rs 10 lakh each by 550 active members. A sum of Rs 55 lakh will accrue as the initial contribution of Rs 10,000 each from 550 active members and finally a sum of Rs 2 crore by way of levy on the members turnover during the year.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.