INTERVIEW WITH MSE EXECUTIVE DIRECTOR, SHAJI CHERIAN

After his eight-year stint at the Cochin Stock Exchange, Shaji Cherian joined the Madras Stock Exchange as Executive Director in May 1997. He speaks to chennaibest.com, on the latest developments at the exchange.

There are 170 members on record and 120 live members. There are about 1,785 companies listed on the MSE.

During the last two years I have been able to implement the clearing house system. The trades are now settled using a fully automated clearing house. With a Trade Guarantee system and a Settlement Guarantee Fund of Rs 2.5 crore, the exchange now guarantees payment in the event of counter party failure in settlement. And, an on-line surveillance system was set up to safeguard the interests of the members.

In keeping with the demands of the times, the daily rolling settlement system has been introduced, not only in the Madras Stock Exchange, but in stock exchanges all over India and abroad. The transaction and settlement is over in a day. Earlier it was a one week settlement cycle, but with De-mating, it has become possible to settle transactions in a single day.

MSE is also now a Depository Participant (DP) with the National Securities and Depository Limited (NSDL) and the Central Depository Services Limited (CDSL). You can say that both these bodies are the reserve banks of shares and this enables the exchange to trade and settle de-materialised shares.

Recently the exchange has embarked on a plan to provide facilities to trade in the Bombay Stock Exchange.

The MSE has started a subsidiary company called the MSE Financial Services. This subsidiary company has acquired BSE membership. Hereafter the members will be able to trade using the existing network in BSE as well as MSE. With this the trading volumes are expected to grow to Rs 35 crore a day, by the end of this financial year. We are also expecting membership and listings to go up.

The modified carry forward system has improved liquidity and depth in trading. MSE is the only Stock Exchange with this facility in South India.

It is healthy, in the sense that prices of commodities will not be affected by seasonal fluctuations. Trading volume will go up, and thereby liquidity in the Capital Markets. This will result in increased activity in the Primary and Secondary markets, which will make companies access the Capital Market and raise resources. Such resources will create product services and employment; ultimately resulting in growth of the economy.

We recently conducted an investor education programme in liaison with the Unit Trust of India and the Association of Mutual Funds of India, which was well attended and was a huge success. We hope to conduct many such programmes in future.

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