BSE against SEBI move to hike membership rates: report
15 Jun 2010
The Bombay Stock Exchange (BSE) is reportedly not in favour of increasing the minimum net worth for brokers, as suggested by an expert panel of the Securities and Exchange Board of India. On the contrary, the exchange is trying hard to increase membership and expand its reach by reducing charges.
Asia's oldest stock exchange has written against the suggestion to SEBI, according to a Business Standard report citing people familiar with the matter. An e-mail query to BSE's corporate communication department by the paper was not answered.
On 13 May, SEBI announced the recommendation of the committee to review eligibility norms and other functional aspects of various stock market intermediaries. A sub-group of the committee suggested raising the net worth requirement for brokers of the two big stock exchanges, the BSE and the National Stock Exchange (NSE), to Rs1 crore for corporate members and Rs75 lakh for non-corporate members. It also wanted this to rise to Rs 3 crore by 2012.
The suggestion will not impact NSE brokers, as the exchange's net worth requirement is Rs1 crore for corporate members and Rs75 lakh for non-corporate members.
However, it will impact members of BSE, where the minimum net worth requirement for becoming a trading member is Rs30 lakh. According to the report, the SEBI committee's suggestion has hurt BSE's ongoing membership drive. Many brokers who wanted to become BSE members have become cautious and are awaiting clarity.