NSE brokers tussle with rSE counterparts boils

Mumbai, Nov 29 | Updated: Nov 30 2006, 09:00am hrs
The ongoing tussle between the National Stock Exchange (NSE) and the Association of NSE Members of India (Anmi) refuses to die down, with the umbrella broker body in no mood to allow members of regional stock exchanges (RSEs) to gain access to the NSE trading platform.

Having made their opposition to the entry of RSE brokers amply clear, top Anmi office-bearers will now be meeting Securities and Exchange Board of India (Sebi) chairman M Damodaran in the first week of December to discuss this issue, and also highlight the fact that it will be difficult to regulate the large number of members once the broker body attains the status of self-regulatory organisation (SRO).

Incidentally, Anmi members have already met Sebi executive director (ED) Manas Ray and will be meeting him once again, before their final meeting with Damodaran.

According to sources, Anmi members have discussed this issue with Ray, who is also believed to have expressed his reservations on the NSE move. When Anmi members were discussing the NSE and RSE MoU issue with Ray, he told them that Sebi itself was not very comfortable with this tie-up. He was quite open on discussing this issue further with the Anmi members and that is the reason members will be meeting him again, before meeting the Sebi chief says a source close to the development.

According to a broker, the MoU might see many people becoming members of RSEs and then using their membership to get access to the NSE trading platform. Membership of RSEs costs much less than that of the NSE and so if this MoU is implemented, why will anyone want to be a direct member of NSE In fact, one might see NSE members surrendering their costly membership and opting for the cheaper RSE membership, says a broker who deals on NSE.

Earlier in October, NSE had signed a Memorandum of Understanding (MoU) with six RSEs, which gave RSE members trading rights on NSE platform. As a matter of fact, once the RSE members attain trading rights on NSE, they will become members of Anmi and this will lead to a massive surge in the member list of Anmi. This has been a bone of contention between the NSE and Anmi, which is striving hard to attain the status of an SRO.

Anmi is of the view that this MoU will bring nearly 10,000 members under its umbrella and it will be very difficult to control such a huge number of members.

Incidentally, the six RSEs that signed the MoU were those of Delhi, Ahmedabad, Chennai, Bangalore, Ludhiana and the Inter Connected Stock Exchange. According to reports, the RSEs of Kochi and Vadodara are also in the process of signing the MoU.