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EGM to discuss steps to improve BSE's image

Sangita Shah

The Bombay Stock Exchange has convened an extra-ordinary general meeting of its members on Thursday to discuss the current market situation and steps required to improve the image of the exchange. BSE has received requisitions signed by 61 members to convene the EGM.

BSE members, especially certain broker-directors are mired into controversies and are currently being investigated about possible misuse of their positions. The last EGM was held on 11 April 2001 and two committees were set up to advice on the corporatisation and demutualisation process of the bourse. The reports on proposed corporate structure for BSE are expected to be submitted by 27 April.

Champions of the corporatisation of the bourse have pointed out that with the demutualisation independence in corporate governance and management will enable faster decisions, eliminate conflict of interest between the exchange and broker members, improve image and credibility with regulators and investors, enhance global acceptability and will also facilitate entering into formal tie-ups with exchanges/service providers abroad as well as at home.

Another important issue being pointed out is the facilitation for raising finances, especially at a time when exchanges have to invest heavily in technology to deliver results.

According to broker sources, BSE is working on a plan wherein pledge/sale of shares will be possible without discontinuing business.

Capping the voting rights at five per cent will ensure that the present distribution of ownership continues and also the process of nomination of membership right will continue. It is also working on whether distribution of profits is possible.

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