Financial Daily from THE HINDU group of publications
Sunday, Feb 20, 2005
Financial Daily from THE HINDU group of publications Sunday, Feb 20, 2005 |
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Investment World
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Derivatives Markets Markets - Derivatives Markets NSCCL circular
We invite your kind attention to circular NSCC/F&O/C&S/365 dated August 26, 2004 issued by the National Securities Clearing Corporation (NSCCL) regarding the imposition of hefty penalty 1 per cent of the value of increased position for allegedly violating the market-wide position limit as mentioned in the afore-mentioned circular. (The circular was published in the edition dated February 13, 2005, as the NSCCL had indicated that it would apply in the case of Arvind Mills as the open interest position in the F & O segment in those stock had breached the prescribed level of 95 per cent of the market-wide position limit). Instead of putting the onus on trading members (TMs), NSCCL should not allow new positions; clients already having positions should be allowed only to square off. TMs should not be penalised, as it is not possible for them to monitor the circulars/ information on a continuous basis. TMs have received penalty notices from their clearing members for violating the limits in the stock of MASTEK. The penalties could have been reduced to an extent had the NSCCL disseminated the information of penalty imposed to TMs instead of routing it through clearing members. TMs could have then avoided the penalties for the violations on subsequent days. If the NSE could disseminate details of transaction charges/ annual subscription fees directly from TMs, it is not clear why they are routing the levy of penalties through their clearing members? Regarding dissemination of information, it is not correct that the same is widely circulated. It is not sufficient that the critical information is put up just on ticker. The information should be widely circulated by the exchanges by releasing advertisements/press releases in newspapers. Further, it is not clear who has to pay penalties i.e. the client or broker. Ramakanth Inani (Director) Inani Securities Ltd
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