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NSE to launch 'broker plaza';
plans overseas foray
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NEW DELHI
NATIONAL Stock Exchange will soon launch a 'broker plaza' in Mumbai
through its subsidiary NSE.IT and Citicorp group's software firm,
i-flex.
Depending on the success of the broker plaza, an internet-based
common trading platform, the exchange has plans to go abroad with
this concept, NSE managing director Ravi Narain said.
"The broker plaza in Mumbai is slated to come up by third week
of this month," he said.
The leading exchange of the country is prepared with the
infrastructure but the recent telecom strike may delay the launch of
the maiden broker plaza for a few days.
NSE.IT, the NSE floated IT company and i-flex had formed a separate
venture Dotex with 51:49 equity participation for the purpose. Dotex
would provide brokers the facility to trade on the net on a common
platform at a nominal charge.
Although the Securities and Exchange Board of India allowed net
trading a few months ago in NSE and BSE, most of the brokers (about
7,700) with NSE membership and also those connected to BSE, CSE, DSE
and other regional exchanges have shown interest in joining the
plaza as it eliminates the hassles of setting up net-trading
framework separately.
About the overseas plan, Narain said "one of the reasons we
tied up with i-flex is to get access to the markets where the
Citibank group has operations."
Although i-flex operates as a separate division, its major clients
worldwide include Citibank and other leading financial institutions.
In India, HDFC bank uses the financial package of i-flex.
Although turnover through net constitutes a small fraction of total
trade in the Indian bourses, it has the potential of spreading
faster to remote areas where the exchange does not have its VSAT
connectivities.
The proposed broker plaza would enable non-resident Indians to
access the Indian stock exchanges without any difficulty, Narain
said.
The other reason behind choosing i-flex as one of the partners is the
edge it has in software facilitating derivatives trade.
Narain said the market would witness a much higher turnover once the
derivatives trade starts picking up. "We are expecting turnover
to increase significantly once the mutual funds enter the derivative
segment," he said, adding the retail investors would be the
market movers in derivatives trade in the initial phases.
Trading in derivatives through the internet is also expected to pick
up once the softwares are put in place by other exchanges and
brokers.
Sebi has allowed trading in index futures in NSE and BSE from June
this year. Next in the pipeline would be index options, scheduled to
be introduced by this fiscal.- PTI |
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