SEs Asked To Obtain Brokers Undertaking On Software Use

Mumbai, Aug 29: | Updated: Aug 30 2003, 05:30am hrs
The Securities and Exchange Board of India (Sebi) has asked all the stock exchanges (SEs) to take an undertaking from member-brokers that they are all using authorised software for their trading terminals. Sebi has also asked all SEs to comply with this requirement by September 12, 2003.

The recent Sebi move comes in the wake of unearthing of the use of unauthorised software in dabba trading in some of the terminals of the National Stock Exchange (NSE).

During a crackdown by a joint team of Sebi-NSE recently, some of the dabba traders were found using some unauthorised software to route their transactions to NSE terminals.

It may be recalled that during the third week of August, continuing its second round of crackdowns on dabba trading, Sebi-NSE jointly carried out major raid operations on one of the broking entities in Kolkata and unearthed illegal share transactions worth crores. The joint crackdown also revealed unauthorised NSE terminals network put at work for dabba trades in a widespread operation that lasted for more than five days.

Following this development on August 5, Sebi held a meeting of concerned departments where apprehensions were raised over the use of unauthorised software by brokers and sub-brokers. As a fallout of this meeting, Sebi decided to ask SEs to obtain an undertaking from their members and their sub-brokers (including subsidiary companies formed by the exchanges) that they are using only the authorised software.