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BSE Limited is the oldest stock exchange in Asia What is now popularly known as the BSE was established as "The Native Share & Stock Brokers' Association" in 1875. Over the past 135 years, BSE has facilitated the growth of the Indian corporate sector by providing it with an efficient capital raising platform. Today, BSE is the world's number 1 exchange in the world in terms of the number of listed companies (over 4900). It is the world's 5th most active in terms of number of transactions handled through its electronic trading system. And it is in the top ten of global exchanges in terms of the market capitalization of its listed companies (as of December 31, 2009). The companies listed on BSE command a total market capitalization of USD Trillion 1.28 as of Feb, 2010. BSE is the first exchange in India and the second in the world to obtain an ISO 9001:2000 certification. It is also the first Exchange in the country and second in the world to receive Information Security Management System Standard BS 7799-2-2002 certification for its BSE On-Line trading System (BOLT). Presently, we are ISO 27001:2005 certified, which is a ISO version of BS 7799 for Information Security. The BSE Index, SENSEX, is India's first and most popular Stock Market benchmark index. Exchange traded funds (ETF) on SENSEX, are listed on BSE and in Hong Kong. Futures and options on the index are also traded at BSE. BSE continues to innovate: Became the first national exchange to launch its website in Gujarati and Hindi and now Marathi Purchased of Marketplace Technologies in 2009 to enhance the in-house technology development capabilities of the BSE and allow faster time-to-market for new products Launched a reporting platform for corporate bonds christened the ICDM or Indian Corporate Debt Market Acquired a 15% stake in United Stock Exchange (USE) to drive the development and growth of the currency and interest rate derivatives markets Launched 'BSE StAR MF' Mutual fund trading platform, which enables exchange members to use its existing infrastructure for transaction in MF schemes. BSE now offers AMFI Certification for Mutual Fund Advisors through BSE Training Institute (BTI) Co-location facilities for Algorithmic trading BSE also successfully launched the BSE IPO index and PSU website BSE revamped its website with wide range of new features like 'Live streaming quotes for SENSEX companies', 'Advanced Stock Reach', 'SENSEX View', 'Market Galaxy', and 'Members' Launched 'BSE SENSEX MOBILE STREAMER' With its tradition of serving the community, BSE has been undertaking Corporate Social Responsibility (CSR) initiatives with a focus on Education, Health and Environment. BSE has been awarded by the World Council of Corporate Governance the Golden Peacock Global CSR Award for its initiatives in Corporate Social Responsibility (CSR). Other Awards: The Annual Reports and Accounts of BSE for the year ended March 31, 2006 and March 31, 2007 have been awarded the ICAI awards for excellence in financial reporting.

The Human Resource Management at BSE has won the Asia - Pacific HRM awards for its efforts in employer branding through talent management at work, health management at work and excellence in HR through technology Drawing from its rich past and its equally robust performance in the recent times, BSE will continue to remain an icon in the Indian capital market.

"Emerge as the premier Indian stock exchange by establishing global benchmarks.


The Stock Exchange, Mumbai is now BSE Limited a new name, and an entirely new perspective... a perspective born out of corporatization and demutualization. As a corporate entity, our new logo reflects our new mission... smoother, seamless, and efficient, whichever way you look at it. BSE is Asia's oldest stock exchange...carrying the depth of knowledge of capital markets acquired since its inception in 1875. Located in Mumbai, the financial capital of India, BSE has been the backbone of the country's capital markets.

The first ever stock exchange in Asia (established in 1875) and the first in the country to be granted permanent recognition under the Securities Contract Regulation Act, 1956, BSE Limited has had an interesting rise to prominence over the past 133 years While BSE Limited is now synonymous with Dalal Street, it was not always so. The first venues of the earliest stock broker meetings in the 1850s were in rather natural environs - under banyan trees - in front of the Town Hall, where Horniman Circle is now situated. A decade later, the brokers moved their venue to another set of foliage, this time under banyan trees at the junction of Meadows Street and what is now called Mahatma Gandhi Road. As the number of brokers increased, they had to shift from place to place, but they always overflowed to the streets. At last, in 1874, the brokers found a permanent place, and one that they could, quite literally, call their own. The new place was, aptly, called Dalal Street (Brokers' Street). In 2002, the name "The Stock Exchange, Mumbai" was changed to Bombay Stock Exchange. Subsequently on August 19, 2005, the exchange turned into a corporate entity from an Association of Persons (AoP) and renamed as Bombay Stock Exchange Limited. BSE Limited, which had introduced securities trading in India, replaced its open outcry system of trading in 1995, with the totally automated trading through the BSE Online trading (BOLT) system. The BOLT network was expanded nationwide in 1997.

Prominent Position
The journey of BSE Limited is as eventful and interesting as the history of India's securities market. In fact, as India's biggest bourse, in terms of listed companies and market capitalisation, BSE Limited has played a pioneering role in the development of the Indian securities market. It is surely BSE Limited pride that almost every leading corporate in India has sourced BSE Limited services in capital raising and is listed with BSE Limited. Even in terms of an orderly growth, much before the actual legislations were enacted, BSE Limited had formulated a comprehensive set of Rules and Regulations for the securities market. It had also laid down best practices which were adopted subsequently by 23 stock exchanges which were set up after India gained its independence. BSE Limited, as a brand, has been and is synonymous with the capital market in India. Its SENSEX is the benchmark equity index that reflects the health of the Indian economy.

Several Firsts
At par with the international standards, BSE Limited has in fact been a pioneer in several areas. It has several firsts to its credit even in an intensely competitive environment. First in India to introduce Equity Derivatives. First in India to launch a Free Float Index. First in India to launch US$ version of BSE Limited. First in India to launch Exchange Enabled Internet Trading Platform. First in India to obtain ISO certification for a stock exchange. 'BSE On-Line Trading System' (BOLT) has been awarded the globally recognised the Information Security Management System standard BS7799-2:2002 First to have an exclusive facility for financial training.

First in India in the financial services sector to launch its website in Hindi and Gujarati. Shifted from Open Outcry to Electronic Trading within just 50 days. First bell-ringing ceremony in the history of the Indian capital markets (listing ceremony of Bharti Televentures Ltd. on February 18, 2002)

Investor Education
An equally important accomplishment of BSE Limited is its nationwide investor awareness campaign - "Safe Investing in the Stock Market"- under which awareness campaigns and dissemination of information through print and electronic medium is undertaken across the country. BSE Limited also actively promotes the securities market awareness campaign of the Securities and Exchange Board of India.

Board of Directors

Non-Executive Chairman

Mr. S. Ramadorai Public Interest Director Vice Chairman Tata Consultancy Services Ltd

Managing Director & Chief Executive Officer

Mr.Madhu Kannan

Public Interest Director

Mr. Sudhakar Rao

Dr. Sanjiv Misra - IAS (Retd.)

Shareholder Directors

Mr. Dipak Chatterjee

Mr. Andreas Preuss Deputy CEO Deutsche Borse AG

Mr. Keki M. Mistry Vice-Chairman & CEO HDFC Ltd.

Trading Member Directors

Ms. Deena A.

Mr. Uttam Bagri Designated Director BCB Brokerage Private Ltd.

Mehta Designated Director Asit C. Mehta Investment Interrmediates Ltd.

Mr. Anil M. Shah Designated Director Span Caplease Private Ltd.

BSE places a great deal of emphasis on Information Technology for its operations and performance. The 'Operations & Trading Department' at BSE continuously upgrades the hardware, software and networking systems, thus enabling BSE to enhance the quality and standards of service provided to its members, investors and other market intermediaries. BSE strictly adheres to IS policies and IS Security policies and procedures for its day-to-day operations on 24x7 basis which has enabled it to achieve the BS7799 certification and the subsequent ISO 27001 certification. In addition, BSE has also been successful in maintaining systems and processes uptime of 99.99%. BOLT To facilitate smooth transactions, BSE had replaced its open outcry system with the BSE On-line Trading (BOLT) facility in 1995. This totally automated, screen-based trading in securities was put into practice nation-wide within a record time of just 50 days. BOLT has been certified by DNV for conforming to ISO 27001:2005 security standards.

The capacity of the BOLT platform stands presently enhanced to 80 lakh orders per day.
BSEWebx.co.in BSE has also introduced the world's first centralized exchange based Internet trading system, BSEWEBx.co.in. The initiative enables investors anywhere in the world to trade on the BSE platform. bseindia.com BSE's website www.bseindia.com provides comprehensive information on the stock market. It is one of the most popular financial websites in India and is regularly visited by financial organizations and other stakeholders for updates. Other Technology-based Initiatives

BSE, along with its strategic partners, have put into place several critical processes/systems such as

Derivatives Trading & Settlement System (DTSS) Electronic Contract Notes (ECN)

Unique Client Code registration (UCC) Real-time Data Dissemination System Integrated Back-office System - CDB / IDB Book Building System (BBS) Reverse Book Building System (RBBS) Debt Market Director's Database

A Large Private Network BSE operates a large private network in India. The network uses following segments to cater to market intermediaries:BSE's Campus LAN: Connects market participant offices across 20 floors of BSE campus to BSE systems. BSE Campus comprises of 3 BSE buildings: P.J. Towers, Rotunda and Cama building BSE WAN: TDM / MPLS lines from different service providers cater to connectivity requirements of market participants across the country. Wired / Wireless media is used. VSATs: Satellite based communication system serves the connectivity requirements of market participants in remote areas. Services are provided through BSE's Satellite Communication Hub in Mumbai. Connectivity forms are available at url : http://www.bseindia.com/about/bolt_connect_forms.asp

BSE Online Surveillance System - integrated (BOSS-i). an Real-time system to closely monitor the trading and settlement activities of the member-brokers. This system enables BSE to detect market abuses at a nascent stage, improve the risk management system and strengthen the self-regulatory mechanisms. State-of-the-art Hardware BSE uses higher-end, fault-tolerant systems for its trading and related functionalities. It uses Integrity Non-stop NS16000 and S88000 systems for its online trading systems (BOLT). The systems have been designed to deliver the best performance without compromising on key factors of availability, scalability, ROI and TCO. RISC based Unix Severs rp8420 from HP: for our Derivatives, Settlement, Backoffice, Data Feed, BBS, RBBS and other systems related to trading and related functionalities. The systems are facilitated by the use of the robust and high available storage subsystems from HP. Intel blade servers running on Microsoft platform are used for the Internet based trading system (ITS) enabling the end users to carry out the trading activities from any location facilitated by the internet. Intel blade servers running on Microsoft platform are also used for bseindia.com website, one of the best portals on the capital market which is also facilitated by the regional languages viz Hindi and Gujarati.

Safety of the Market

A major objective of BSE is to promote and inculcate honourable and just practices of trade in securities transactions, an

discourage malpractices.

The surveillance function at BSE has assumed greater importance over the last few years. It has a dedicated Surveillanc Department to keep a close, and a daily, watch on the price movement of scrips, detect market manipulations like price rigging monitor abnormal prices and volumes which are not consistent with normal trading pattern and monitor the Members' exposur to ensure that defaults do not occur. This Department, which is headed by a General Manager, reports directly to Managing Di

As per the guidelines issued by SEBI, except for scrips on which derivative products are available and are part of indices which derivative products are available,a daily Circuit Filter of 20% is applied on all scrips.Circuit filters ensures that the price o scrip cannot move upward or downward beyond the limit set for the day.BSE has imposed dummy circuit filters to avoid freak due to punching errors by the Trading Members.

The abnormal variation in the prices as well as the volumes of the scrips are scrutinised and appropriate actions are tak scrips which reach new high or new low and companies which have high trading volumes are watched closely. A special emph laid on the newly listed scrips.

In case certain abnormalities are noticed, the circuit filters are reduced to make it difficult for the price manipulators to in or push down the prices of a scrip within a short period of time. BSE imposes special margins in scrips where it suspects an at ramp up the prices by creating artificial volumes. BSE also transfers the scrips for trading and settlement to the trade-to-trade category which leads to giving/taking delivery of shares on a gross level and no intra-day/settlement netting off/squaring off fac permitted. If abnormal movements continue despite the aforesaid measures, BSE suspends the trading in the scrip.

Detailed investigations are conducted in cases where price manipulation is suspected and disciplinary action is taken ag the concerned Members.

BSE has an On-line Real Time (OLRT) Surveillance System, which has been in operation since July 15, 1999. Under th system, alerts are generated on-line, in real time during the trading hours, based on certain preset parameters like the price an volume variation in scrips, a Member taking unduly large positions not commensurate with their financial position or having concentrated positions in one or more scrips.

This system integrates several databases like company profiles, Members' profiles and historical data of turnover and pr movement in scrips, Members' turnovers, their pay-in obligations, etc.

Trading, Settlement and Risk Management


Timing Trading on the BOLT System is conducted from Monday to Friday between 9:15 a.m. and 3:30 p.m. normally. Refer Notice No. 20101014-8 for call auction. Groups The scrips traded on BSE have been classified into various groups. BSE has, for the guidance and benefit of the investors, classified the scrips in the Equity Segment into 'A', 'B', 'T' and 'Z' groups on certain qualitative and quantitative parameters. Criteria for "A" Group Companies The "F" Group represents the Fixed Income Securities. The "T" Group represents scrips which are settled on a trade-to-trade basis as a surveillance measure. Trading in Government Securities by the retail investors is done under the "G" group. The 'Z' group was introduced by BSE in July 1999 and includes companies which have failed to comply with its listing requirements and/or have failed to resolve investor complaints and/or have not made the required arrangements with both the depositories, viz., Central Depository Services (I) Ltd. (CDSL) and National Securities Depository Ltd. (NSDL) for dematerialization of their securities. BSE also provides a facility to the market participants for on-line trading of odd-lot securities in physical form in 'A', 'B', 'T' and 'Z' groups and in rights renunciations in all groups of scrips in the Equity Segment. With effect from December 31, 2001, trading in all securities listed in the Equity segment takes place in one market segment, viz., Compulsory Rolling Settlement Segment (CRS). The scrips of companies which are in demat can be traded in market lot of 1. However, the securities of companies which are still in the physical form are traded in the market lot of generally either 50 or 100. Investors having quantities of securities less than the market lot are required to sell them as "Odd Lots". This facility offers an exit route to investors to dispose of their odd lots of securities, and also provides them an opportunity to consolidate their securities into market lots.

This facility of selling physical shares in compulsory demat scrips is called an Exit Route Scheme. This facility can also be used by small investors for selling up to 500 shares in physical form in respect of scrips of companies where trades are required to be compulsorily settled by all investors in demat mode. Listed Securities The securities of companies, which have signed the Listing Agreement with BSE, are traded as "Listed Securities". Almost all scrips traded in the Equity segment fall in this category.

Permitted Securities To facilitate the market participants to trade in securities of such companies, which are actively traded at other stock exchanges but are not listed on BSE, trading in such securities is facilitated as " Permitted Securities" provided they meet the relevant norms specified by BSE Tick Size: Tick size is the minimum difference in rates between two orders on the same side i.e., buy or sell, entered in the system for particular scrip. Trading in scrips listed on BSE is done with the tick size of 5 paise. However, in order to increase the liquidity and enable the market participants to put orders at finer rates, BSE has reduced the tick size from 5 paise to 1 paise in case of units of mutual funds, securities traded in "F" group and equity shares having closing price up to Rs. 15 on the last trading day of the calendar month. Accordingly, the tick size in various scrips quoting up to Rs.15 is revised to 1 paise on the first trading day of month. The tick size so revised on the first trading day of month remains unchanged during the month even if the price of scrips undergoes a change.

Computation Of Closing Price Of Scrips The closing price of scrips is computed by BSE on the basis of weighted average price of all trades executed during the last 30 minutes of a continuous trading session. However, if there is no trade recorded during the last 30 minutes, then the last traded price of scrip in the continuous trading session is taken as the official closing price.

Basket Trading System BSE has commenced trading in the Derivatives Segment with effect from June 9, 2000 to enable investors to hedge their risks. Initially, the facility of trading in the Derivatives Segment was confined to Index Futures. Subsequently, BSE has introduced the Index Options and Options & Futures in select individual stocks.

Investors in the cash market had felt a need to limit their risk exposure in the market to the movement in Sensex. With a view to provide investors the facility of creating Sensex-linked portfolios and also to create a linkage of market prices of the underlying securities of Sensex in the Cash Segment and Futures on Sensex, BSE has provided to the investors as well as to its Members a facility of Basket Trading System on BOLT with effect from August 14, 2000. In the Basket Trading System, the investors through the Members are able to buy/ sell all 30 scrips of Sensex in one go in the proportion of their respective weights in the Sensex. The investors need not calculate the quantity of Sensex scrips to be bought or sold for creating Sensex-linked portfolios and this function is performed by the system. The investors can also create their own baskets by deleting certain scrips from 30 scrips in the Sensex. Further, the investors can alter the weights of securities in such profiled baskets and enter their own weights. The investors can also select less than 100% weightage to reduce the value of the basket as per their own requirements. To participate in this system, the Members need to indicate the number of Sensex basket(s) to be bought or sold, where the value of one Sensex basket is arrived at by the system by multiplying Rs.50 to the prevailing Sensex. For example, if the Sensex is 15,000, the value of one basket of Sensex would be 15000 x 50= i.e., Rs. 7,50,000/-. The investors can also place orders by entering value of Sensex portfolio to be brought or sold with a minimum value of Rs. 50,000 for each order. The Basket Trading System provides the arbitrageurs an opportunity to take advantage of price differences in the underlying Sensex and Futures on the Sensex by simultaneous buying and selling of baskets comprising the Sensex scrips in the Cash Segment and Sensex Futures. This would provide a balancing impact on the prices in both cash and futures markets. The Basket Trading System thus meets the need of investors and also improves the depth in cash and futures markets. The trades executed under the Basket Trading System are subject to intra-day trading and gross exposure limits available to the Members. The VaR, MTM margins etc, as are applicable to normal trades in the Cash Segment, are also recovered from the Members.

Compulsory Rolling Settlement All transactions in all groups of securities in the Equity segment and Fixed Income securities listed on BSE are required to be settled on T+2 basis (w.e.f. from April 1, 2003). The settlement calendar, which indicates the dates of the various settlement related activities, is drawn by BSE in advance and is circulated among the market participants. Under rolling settlements, the trades done on a particular day are settled after a given number of business days. A T+2 settlement cycle means that the final settlement of transactions done on T, i.e., trade day by exchange of monies and securities between the buyers and sellers respectively takes place on second business day (excluding Saturdays, Sundays, bank and Exchange trading holidays) after the trade day. The transactions in securities of companies which have made arrangements for dematerialization of their securities are settled only in demat mode on T+2 on net basis, i.e., buy and sell positions of a member-broker in the same scrip are netted and the net quantity and value is required to be settled. However, transactions in securities of companies, which are in "Z" group or have been placed under "trade-to-trade" by BSE as a surveillance measure ("T" group) , are settled only on a gross basis and the facility of netting of buy and sell transactions in such scrips is not available.

The transactions in 'F' group securities representing "Fixed Income Securities" and " G" group representing Government Securities for retail investors are also settled at BSE on T+2 basis. In case of Rolling Settlements, pay-in and pay-out of both funds and securities is completed on the same day. Members are required to make payment for securities sold and/ or deliver securities purchased to their clients within one working day (excluding Saturday, Sunday, bank & BSE trading holidays) after the payout of the funds and securities for the concerned settlement is completed by BSE. This is the timeframe permitted to the Members to settle their funds/ securities obligations with their clients as per the Byelaws of BSE. The following table summarizes the steps in the trading and settlement cycle for scrips under CRS :


o Trading on BOLT and daily downloading of statements showing details of transactions and margins at the end of each trading day. Downloading of provisional securities and funds obligation statements by member-brokers. 6A/7A* entry by the member-brokers/ confirmation by the custodians. Confirmation of 6A/7A data by the Custodians upto 1:00 p.m. Downloading of final securities and funds obligation statements by members Pay-in of funds and securities by 11:00 a.m. and pay-out of funds and securities by 1:30 p.m. The member-brokers are required to submit the pay-in instructions for funds and securities to banks and depositories respectively by 10:40 a.m. Auction on BOLT at 2.00 p.m. Auction pay-in and pay-out of funds and securities by 09:30 a.m. and 10:15 a.m. respectively.



T+2 T+3

o o

The pay-in and payout of funds and securities takes places on the second business day (i.e., excluding Saturday, Sundays and bank and BSE trading holidays) of the day of the execution of the trade. The settlement of the trades (money and securities) done by a Member on his own account or on behalf

of his individual, corporate or institutional clients may be either through the Member himself or through a SEBI registered custodian appointed by him/client. In case the delivery/payment in respect of a transaction executed by a Member is to be given or taken by a registered custodian, the latter has to confirm the trade done by a Member on the BOLT System through 6A-7A entries. For this purpose, the custodians have been given connectivity to the BOLT System and have also been admitted as clearing member of the Clearing House. In case a registered custodian does not confirm a transaction done by a Member within the time permitted, the liability for pay-in of funds or securities in respect of the same devolves on the concerned Member. The following statements can be downloaded by the Members in their back offices on a daily basis.

h. i. j.

Statements giving details of the daily transactions entered into by the Member.

Statements giving details of margins payable by the Member in respect of the trades executed by him. Statements of securities and fund obligation.

k. Delivery/Receive orders for delivery /receipt of securities.

BSE generates Delivery and Receive Orders for transactions done by the Members in A, B, and F and G group scrips after netting purchase and sale transactions in each scrip whereas Delivery and Receive Orders for "T", "C" & "Z" group scrips and scrips which are traded on BSE on "trade-to-trade" basis are generated on a gross basis, i.e., without netting of purchase and sell transactions in a scrip. However, the funds obligations for the Members are netted for transactions across all groups of securities. The Delivery Order/Receive Order provides information like the scrip and quantity of securities to be delivered/received by the Members through the Clearing House. The Money Statement provides scrip wise/item wise details of payments/receipts of monies by the Members in the settlement. The Delivery/Receive Orders and Money Statement can be downloaded by the Members in their back office Pay-in and Pay-out for 'A', 'B', 'T', 'C', "F", "G" & 'Z' Group of Securities The trades done on BOLT by the Members in all securities in CRS are now settled on BSE by payment of monies and delivery of securities on T+2 basis. All deliveries of securities are required to be routed through the Clearing House, The Pay-in /Pay-out of funds based on the money statement and that of securities based on Delivery Order/ Receive Order issued by BSE are settled on T+2 day. Demat pay-in : The Members can effect pay-in of demat securities to the Clearing House through either of the Depositories i.e. the National Securities Depository Ltd. (NSDL) or Central Depository Services (I) Ltd. (CDSL). The Members are required to give instructions to their respective Depository Participants (DPs) specifying details such as settlement no., effective pay-in date, quantity, etc. Members may also effect pay-in directly from the clients' beneficiary accounts through CDSL. For this, the clients are required to mention the settlement details and clearing member ID through whom they have sold the securities. Thus, in such cases the Clearing Members are not required to give any delivery instructions from their accounts.

In case a Member fails to deliver the securities, the value of shares delivered short is recovered from him at the standard/closing rate of the scrips on the trading day.

Auto delivery facility : Instead of issuing delivery instructions for their securities delivery obligations in demat mode in various scrips in a settlement /auction, a facility has been made available to the Members of automatically generating delivery instructions on their behalf from their CM Pool accounts maintained with NSDL and CM Principal Accounts maintained with CDSL. This auto delivery facility is available for CRS (Normal & Auction) and for trade-to-trade settlements. This facility is, however, not available for delivery of non-pari passu shares and shares having multiple ISINs. Members wishing to avail of this facility have to submit an authority letter to the Clearing House. This auto delivery facility is currently available for Clearing Member (CM) Pool accounts and Principal accounts maintained by the Members with the respective depositories.

Pay-in of Securities in Physical Form In case of delivery of securities in physical form, the Members are required to deliver the securities to the Clearing House in special closed pouches along with the relevant details like distinctive numbers, scrip code, quantity, etc., on a floppy. The data submitted by the Members on floppies is matched against the master file data on the Clearing House.If there is no discrepancy, the securities are accepted. Funds Pay-in The bank accounts of Members maintained with the clearing banks, viz., Axis Bank Ltd.,Bank of India, Bank of Baroda, Canara Bank, Citi Bank, Corporation Bank, Dhanalaxmi Bank, HDFC Bank Ltd., Hongkong & Shanghai Banking Corporation Ltd., ICICI Bank Ltd, Indusind Bank Ltd., IDBI Bank, Kotak Mahindra Bank, Oriental Bank of Commerce., Punjab National Bank, State Bank of India, Standard Chartered Bank, Union Bank of India, Yes Bank are directly debited through computerized posting for their funds settlement obligations. In case of Members whose funds pay-in obligations are not cleared at the scheduled time, action such as levy of penalty and/or deactivation of BOLT TWSs , is initiated as per the prescribed penalty norms. Securities Pay-out Demat securities are credited by the Clearing House in the Pool/Principal Accounts of the Members. BSE has also provided a facility to the Members for transfer of pay-out securities directly to the clients' beneficiary owner accounts without routing the same through their Pool/Principal accounts in NSDL/ CDSL. For this, the concerned Members are required to give a client wise break up file which is uploaded by the Members from their offices to the Clearing House. Based on the break up given by the Members, the Clearing House instructs the depositories, viz., CDSL & NSDL to credit the securities to the Beneficiary Owners (BO) Accounts of the clients. In case delivery of securities received from one depository is to be credited to an account in the other depository, the Clearing House does an interdepository transfer to give effect to such transfers.

In case of physical securities, the Receiving Members are required to collect the same from the Clearing House on the pay-out day. Funds Payout The bank accounts of the Members having pay-out of funds are credited by the Clearing House with the Clearing Banks on the pay-in day itself In case a Member fails to deliver the securities, the value of shares delivered short is recovered from him at the standard/closing rate of the scrips on the trading day.

Penalty Norms For Settlement (Pay-in) Defaults

Violation/s Non-fulfillment of funds obligation (viz. Normal pay-in, securities shortage pay-in and auction pay-in) and failure to deposit additional capital towards capital cushion requirement as per SEBI norms within stipulated time.

Shortage amount

Late fees/fines/penalty

a) If the shortage amount is more than the Base Minimum Capital (at present Rs.10 lakhs) :

a) - 1% of such shortage amount, and - additional 0.07% per day of the shortage amount. - Also, the trading facility of such member shall be withdrawn and the securities pay-out shall be withheld.

b) If the funds shortage is less than the Base Minimum Capital (at present Rs.10 lakhs) :

b) - 1% of such shortage amount, and - additional 0.07% per day of the shortage amount. - In cases where the shortage amount exceeds 20% of the BMC but less than the BMC on 6 occasions within a period of three months, then also the trading facility of the member shall be withdrawn* and the securities pay-out due to the member shall be withheld.

(*In case the members trading facility has been withdrawn on account of (b) above, then upon recovery of the complete shortages, the member shall be permitted to trade, subject to such members providing a deposit equivalent to his cumulative funds shortage amount as the funds shortage collateral. Such deposit shall be kept with the Exchange for a period of ten rolling settlements and shall be released thereafter. Such deposit shall not be available against margin liabilities and also such deposit will not earn any interest. Such deposit may be by way of cash, fixed deposit receipts of banks and/or bank guarantee.)

In case a member fails to meet his obligation amounting to less than 20% of BMC, a penalty equivalent to his obligation amount or Rs.5,000/- whichever is less will be levied: Further, if a member fails to meet his pay-in obligations of a normal settlement, auction settlement and that of securities delivered short in the pay-in for the same settlement, then such instances of default would be considered as a single instance for the purpose of counting violations and levying penalties as above. Non deposit of additional capital under capital cushion requirement would be considered as a separate instance for the purpose of counting instances of violation and levying fines/penalties as above.

Shortages The Clearing House arrives at the shortages in delivery of various scrips by the Members on the basis of their delivery obligations and actual delivery. The Members can download the statement of shortages in delivery of scrips in A, B, T, Z, F, Odd-lot & G group scrips on T+2 day, i.e., Pay-in day. After downloading the shortage details, the Members are expected to verify the same and report discrepancy, if any, to the Clearing House immediately. If no discrepancy is reported within the stipulated time, the Clearing House assumes that the shortage of a

Member is in order and proceeds to auction/ close-out the same. Moreover, the value of shares delivered short is recovered from the Member at the standard/closing rate of the scrips on the trading day.

Auctions An Auction Tender Notice is issued by BSE to the Members informing them about the names of the scrips short or not delivered, quantity slated for auction and the date and time of the auction session on the BOLT. The auction for the undelivered quantities is conducted on T+2 day between 2:00 p.m. and 2.45 p.m. for all the scrips under Compulsory Rolling Settlements except those in "Z" group and scrips on "trade to trade" basis which are directly closed-out. A Member who has failed to deliver the securities of a particular company on the pay-in day is not allowed to offer the same in auction. The Members, who participate in the auction session, can download the Delivery Orders in respect of the auction obligations on the same day, if their offers are accepted. The Members are required to deliver the shares in the Clearing House on the auction Pay-in day, i.e, T+3. Pay-out of auction shares and funds is also done on the same day, i.e., T+3.

Self-Auction The Delivery and Receive Orders are issued by BSE to the Members after netting off their purchase and sell transactions in scrips where netting of purchase and sell positions is permitted. It is likely in some cases, a selling client has failed to deliver the shares sold in a settlement to a Member. However, this may not result in failure of the Member to deliver the shares to the Clearing House as there was a purchase transaction of his some other buying client in the same scrip and the same was netted off for the purpose of settlement. In such a case, the Member would require shares so that he can deliver the same to his buying client, which otherwise would have taken place from the delivery of shares by his selling client. To provide shares to the Members in such cases, they have been given an option to submit the details of such internal shortages on floppies on pay-in day for conducting self-auction (i.e., as if they have defaulted in delivery of shares to the Clearing House). These shortages are clubbed with the normal shortages in a settlement arrived at by the Clearing House and the auction is conducted by the Clearing House for the combined shortages. Close-out Close-out is effected for cases when no offer for a particular scrip is received in an auction or when Members who offer the scrips in auction, fail to deliver the same or shortages pertaining to those groups of securities for which auctions are not conducted. The close-out rates for different segments are as under o 'A', 'B' and 'F' group The close-out rate is higher of the following rates : a) The highest rate of the scrip from the trading day to the day on which the auction is conducted for the respective settlement. b) 20% above the closing rate as on the day of auction/close out of the respective settlement.

"Odd Lot", "T" and "Z" group and Patawat objections

The closeout rate is higher of the following rates: a) The highest rate of the scrip from the day of trading to the day of auction of the respective settlements; b) 10% above the closing rate as on the day of auction/ close out of the respective settlement.

"G" group In case of shortages in "G" group, the shortages are closed out at Zero Coupon Yield Curve (ZCYC) plus a 5% penalty. The closeout amounts are debited to the bank accounts of those Members who have failed to deliver the securities against their sale obligations and credited to the bank accounts of those Members who had bought the securities but did not receive the same.

Rectification of Bad Deliveries One of the biggest problems faced by the investors in the secondary market while dealing in physical securities is that of bad delivery arising out of various reasons. Based on the reasons, these bad deliveries are classified into two categories, namely;

o o

Patawat (Settlement) Objections Company Objections Patawat (Settlement) Objections The physical securities received in payout are required to be checked by the Members for good delivery as per the norms of good and bad delivery of documents prescribed by the SEBI. If the securities are not considered good delivery, the receiving Member has to participate in " Patawat Objection Cycle" given below:

Transfer Deed is out of date. Cheques for the dividend adjustment for new shares where distinctive numbers are given in the BSE Notice is not enclosed. Stamp of the Registrar of Companies on the Transfer Deed is missing. Details like distinctive numbers, transferors names, etc. are not filled in the Transfer Deeds. Delivering Member's stamp on the reverse of the Transfer Deed is missing. Witness stamp or signature on Transfer Deed is missing. Signature of the transferor is missing. Death Certificate (in cases where one or more of the transferors is/ are deceased) is missing.

A penalty at the rate of Rs.100 per Delivery Order is recovered by BSE on the delivering Members for delivering shares, which are not in order. Company Objections

Bad deliveries arising out of rejection of physical shares sent to the companies by the buyers for getting them transferred in their names are termed as Company Objections. In order to help the buyers, BSE has set up a Bad Delivery Cell (BDC), which conducts its operations based on the Uniform Norms for Good/Bad Deliveries formulated by SEBI. BDC follows a weekly cycle for acceptance of Objections and Rectifications. The cycle commences every Tuesday, when the Objections are accepted in the Clearinghouse. The Members have a facility of directly uploading the bad delivery claims in the BDC system, and download the various reports through the same. The physical/objection documents are accepted in the Clearinghouse only if the data has been successfully uploaded in the BDC system. The Objections, which have been forwarded to the Clearinghouse by the Buying Clearing Members on the first day of the cycle, need to be rectified by the Seller Clearing Members and submitted to Clearinghouse on the 21st day of that particular cycle. BDC issues notices every Monday, Tuesday and Thursday informing the market about various activities to be carried out by them. The notice issued on Monday contains the details of the Clearing Members against whom the Buyer Member has lodged an Objection. The notice issued on Tuesday is information to the Market about the Bad Delivery Schedule for the next week's cycle. And the Thursday's notice contains the details about the shares going in Auction for the un-rectified securities, if any. After receipt of the Objections, the Seller Member can approach the verification officers of the BDC for obtaining the Award for Invalid Objections, if any. The BDC officers, on the basis of the guidelines issued by SEBI for Good and Bad Deliveries of Documents and on the basis of provisions of other relevant Acts, give an Award stating "Not in Order/In Order". If the Award is given as "In Order", the Seller Member is required to accept the objections and to rectify the same within 21 days. If the objections are not rectified within the prescribed period of 21 days, the relevant transactions are auctioned or closed out as per the procedure laid down in this regard. If the Objection is "Not In Order", the Seller Members are required to deliver back the shares to the Clearing House, who in turn returns the same to the Buyer Members. After the award session for invalid objections, the deletion/modification entries are made and a statement titled Permanent Claim Status is generated. The same is available to the Seller Members and the Buyer Members in order to enable the Seller Members to submit rectifications on a floppy. To minimise the interfaces, the Members can also upload rectification directly through BDC system and can download the error report. The rectification will be accepted only if the data is properly uploaded in the BDC system. Along with the award for invalid objections, the award for the invalid rectifications, if any, is also given. If the Seller Member has not properly submitted the rectifications, an award is given as "Not In Order". In that case the Buyer Members are required to deliver back the shares to the Clearing House who, in turn, returns the same to the Seller Member. Thus, all Invalid Rectifications go for auction/close-out along with all Unrectified Objections. The auction is conducted on 30th day and the Buyer Member receives the shares in auction pay-in after 3 days. The Buyer Member also receives the close out amount, for the shares not received in auction offer, and for the un-rectified objections in Group Z and T on the same day. The disputed matters are referred to arbitration. The BDC accepts the objections only if the Company Objection Memo is forwarded or the Patawat Objection Memo duly signed by the Arbitrator is forwarded The share documents which have been returned under objection by a company for the second time, can be reported in the BDC system, as Second Time Objection. The seller in this case is not given a chance to rectify the objections and the claim is closed out on the 10th day after the commencement of the particular cycle. In case of objection reported with the BDC as Fake/Forged and Missing/Lost/Stolen shares, the

rectification is allowed only in Demat mode. After every BDC auction, a report is generated for bad deliveries submitted under the reason 'fake/forged shares'. Members are cautioned against introducing fake/forged shares. They have to follow the policy of 'Know your client', and be careful while choosing their clients. In case the amount of fake/forged shares introduced by a Member exceeds Rs.10 lakhs in a year, he has to submit an explanation for the same to BDC In case where the value of fake/forged shares introduced by a Member exceeds a certain level, stringent action is taken against him. The list of members who have introduced fake/forged shares exceeding Rs. 5 lakhs in one quarter is also circulated to all the stock exchanges. BDC also maintains the data of lost/ stolen/ fake/ duplicate shares of all listed companies. BDC has informed all listed companies to forward updated database of such shares in soft copy or through E-mail, so that the Members and the Clearing House can download the same. This enables the Members to check the bad shares at the entry point i.e., at the time when shares are delivered. This procedure prevents circulation of bad shares in the market, so that the same cannot be lodged with the company for transfer. Bulk Deals Disclosures in the Cash Segment With a view to imparting transparency in BULK Deal so as to prevent rumors/speculation about deals causing volatility in the scrip prices, disclosures shall be made with respect to all transactions in scrip where total quantity of shares brought/sold is more than 0.5% of the number of equity shares of the company listed on the stock exchange. Trading member shall disclose to the stock exchange the name of the scrip, name of the client, quantity of shares bought/sold and the traded price. Please refer to the Exchange notice no.20090505-10 dated the May 05, 2009 for Modalities for Bulk and Block deal reporting.

Block Deals Disclosures in the Cash Segment In order to facilitate execution of large trades, a separate trading window is provided. A trade, with a minimum quantity of 5,00,000 shares or minimum value of Rs.5 crore executed through a single transaction on this separate window of the stock exchange will constitute a BLOCK Deal. The Stock Exchanges shall disseminate the information of BLOCK Deal such as the name of the scrip, name of the client, quantity of shares brought/sold, traded price, etc to the general public on the same day, after the market hours. Please refer to latest Exchange notice no.20090505-10 dated the May 05, 2009 for Modalities for Bulk and Block deal reporting.

Risk Management

Cash Market

The expansion of BOLT across the country has led to a significant increase in volumes and liquidity. This has also consequently increased the risk of default by the Members in meeting their settlement obligations. BSE has initiated several risk management measures in order to maintain the safety of the market and to avert defaults by the BSE Members in meeting their payment and delivery obligations. Total Liquid Assets The core of the risk management system is the liquid assets deposited by the Members with BSE. These liquid assets cover the following five requirements: Base Minimum Capital (BMC)

All Members are required to maintain a BMC of Rs.10 lakhs with BSE in the prescribed manner at all times. The composite corporate Members are required to maintain BMC in multiple of the membership rights held by them. The BMC, as prescribed by SEBI, is required to be kept in the form of cash (minimum 12.5%), Fixed Deposit Receipt(s) or Bank Guarantee(s) issued by bank(s) (minimum 37.5%) and balance in the form of eligible shares. The eligible shares for the purpose of the securities portion of the BMC are A and B group securities forming part of Group I classified as per the parameters of volatility and liquidity as stipulated in SEBI circular No. MRD/DoP/SE/Cir-07/2005 dated February 23, 2005. BMC is not available for adjustment towards margins. Additional Capital b. Members are also allowed to deposit Additional Capital (AC) over and above the BMC with BSE as follows : (Liquid Assets) : Cash Equivalent.

Particulars (i) Cash (ii) Bank Fixed Deposit Receipts ( FDRs ). iii) Bank Guarantee

Hair-cut Nil Nil Nil

Limit on Capital Deposit No Limit No Limit Limit on BSE's exposure to a single bank exposure as stipulated in the SEBI circular No. MRD/DoP/SE/Cir-07/2005 dated February 23, 2005. No limit No limit.

(iv) Securities of the Central 10% Government * . (v) Units of liquid Mutual 10% Fund (or) Govt. Sec. Mutual

Fund (by whatever name called which invests in government securities) *.

Other Liquid Assets - Non-Cash Component (Total of Other Liquid Assets should not exceed total of Cash Equivalent) :

Particulars Non-Cash equivalent :


Limit on Capital Deposit Limit on BSE's exposure to a single issuer as stipulated in the SEBI circular No. MRD/DoP/SE/Cir-07/2005 dated February 23, 2005.

(i) Liquid (Group-I) Equity Same as the Value at Risk Shares (as per the criteria (VaR) margin for the for classification of scrips respective shares. on the basis of liquidity). (Only A and B group securities forming part of such Group I) (ii)Mutual Fund units (other Same as the VaR margins than those listed under cash for the units computed equivalent). * using the traded price on BSE, if available, or else, using the NAV of the unit treating it as a liquid security.

* BSE, at present, does not accept such liquid assets towards collateral. Cash equivalents should be at least 50% of the liquid assets. This implies that Other Liquid Assets in excess of the total Cash Equivalents is not regarded as part of the Total Liquid Assets.


MTM (Mark-To-Market) Losses: Mark-to-market losses on outstanding settlement obligations of the Member. d. VaR Margins: Value at risk margins to cover potential losses for 99% of the days. e. Extreme Loss Margins: Margins to cover the expected loss in situations that lie outside the coverage of the VaR margins. f. Base Minimum Capital: Capital required for all risks other than the market risk (for example, operational risk and client claims). g. Special Margin : Special margin collected as a surveillance measure.

Members are required to maintain the liquid assets (collateral) to cover all the above five requirements. There are no other margins in the risk management system.

Single Trade Cumulative Trades for the Day

Immediately upon the execution of the order where the traded quantity, either buy or sell ,on account of any trade is more than 0.5% of the number of equity shares of the company listed on BSE.

Within one hour from the closure of the trading hours, where the cumulative quantity traded under any single client code on that day either purchase or sale is more than 0.5% of the number of equity shares of the company listed at BSE. o The valuation of shares deposited by the Members with BSE is done on a daily basis, and a hair-cut equivalent to the respective VaR of individual scrip is applied i.e., only the residual value of eligible shares deposited is considered for the purpose of evaluation of capital(collateral) deposited by the Members with BSE.. The eligible shares deposited by the Members towards BMC are accepted by BSE in demat form only. The cash can be deposited by the Members towards capital by submitting instructions to their clearing banks to debit their bank accounts and credit the amount to BSE's account. As regards the Fixed Deposit Receipts (FDRs) of banks, the duly discharged FDRs are required to be submitted by the Members to BSE in the name of " BSE Limited. A/c - trade name of the Member" issued by any Mumbai-based branch or payable at any Mumbai-based branch of any scheduled commercial or co-operative bank. The bank guarantees submitted by the Member towards the capital have to be in the approved format in favour of BSE either issued or payable by any Mumbai-based branch of a scheduled commercial bank only. However, in case FDRs/ bank guarantees are issued by the outstation branches of scheduled commercial banks (i.e., branches outside Mumbai), the payment of the proceeds on encashment of FDRs and invocation of bank guarantees by BSE has to be assured by a Mumbai-based branch of the concerned issuing bank. b. For every instance of deactivation of BOLT TWSs due to non-availability of total liquid assets, fines/penalties are levied as per the structure given below :

o o


No. of instances in a financial year

Fines/penalties ( Rs. )

Fines/penalties for de-activation of 1 st to 5 th BOLT TWSs due to noninstance. availability of Total Liquid Assets 6 th to 15 th

Rs. 5,000/- per instance. Rs. 10,000/- per instance or

(collateral) during the trading instance. session and in case of de-activation of BOLT TWSs due to nonavailability of total liquid asset at the end of day because of shortfall of Total Liquid Assets due to 16 th to 30 th expiry of Bank Guarantees/Fixed instance Deposit Receipts, evaluation of securities, etc.

0.25% of the amount of shortfall of total liquid assets on account of violation of trading limits, whichever is higher. Rs. 15,000/- per instance or 0.25% of the amount of shortfall of total liquid assets on account of violation of trading limits, whichever is higher. Rs. 20,000/- per instance or 0.25% of the amount of shortfall of total liquid assets on account of violation of trading limits, whichever is higher.

31 st instance onwards.

BSE, as a precautionary measure, provides on-line warnings to its Members on the BOLT TWSs when they reach 70%, 80% and 90% of the utilisation of Total Liquid Assets (TLA). When a Member crosses 100% of the utilization of TLA , a message is flashed on his BOLT TWSs which says "Capital Violated : Member Trading Suspend" and immediately thereafter, all his BOLT TWSs get deactivated. The BOLT TWSs of the Members in such cases are reactivated only after they deposit the required additional liquid assets. To avoid de-activation of BOLT TWSs and levy of fines/penalties, the additional liquid assets should be deposited with BSE sufficiently in advance. o Liquidity Categorization of Securities The securities are classified into three groups based on their liquidity:


Trading Frequency (over the previous six months see Note A) At least 80% of the days Less than 80% of the days

Impact Cost (over the previous six months see Note A Less than or equal to 1% More than 1% N/A

Liquid Securities (Group I) At least 80% of the days Less Liquid Securities (Group II) Illiquid Securities (Group III)
o Note:

Monthly Review o The trading frequency and impact cost is calculated on the 15th of each month on a rolling basis considering the previous six months for impact cost and previous six months for trading frequency. On the basis of the trading frequency and impact cost so calculated, the securities move from one group to another group from the 1st of the next month. Categorisation of Newly-listed Securities For the first month and till the time of monthly review as mentioned above, a newly listed stock is categorised in that group where the market capitalization of the newly listed stock exceeds or equals the market capitalization of 80% of the stocks in that particular group. Subsequently, after one month, whenever the next monthly review is carried out, the actual trading frequency and impact cost of the security is computed, to determine the liquidity categorization of the security. In case any corporate action results in a change in ISIN, the securities bearing the new ISIN is treated as newly listed scrip for group categorization. Calculation of mean impact cost: The mean impact cost is calculated in the following manner: a. Impact cost is calculated by taking four snapshots in a day from the order book in the past six months. These four snapshots are randomly chosen from within four fixed tenminutes windows spread through the day. b. The impact cost is the percentage price movement caused by an order size of Rs.1 lakh from the average of the best bid and offer price in the order book snapshot. The impact cost is calculated for both, the buy and the sell side in each order book snapshot.

o o

Dissemination of Information The lists of securities forming part of groups I, II and III are disseminated on the BSE website on a monthly basis. Margins In order to contain the risk arising out of transactions entered into by the members in various scrips either on their own account or on behalf of their clients, BSE has a well designed risk-management system which inter-alia, includes collection of margins from the Members. BSE accordingly imposes various kinds of margins on the Members based on their outstanding positions in the market. The margining system followed by BSE is described below : Computation of Margins

o o

For securities that have been listed for less than six months, the trading frequency and the impact cost is computed using the entire trading history of the scrip. VaR Margin As mandated by SEBI, the Value at Risk (VaR) margining system, which is internationally accepted as the best margining system, is applicable on the outstanding positions of the Members in all scrips. a. The VaR Margin is a margin intended to cover the largest loss that can be encountered on 99% of the days (99% Value at Risk). For liquid stocks, the margin covers one-day losses while for illiquid stocks, it covers three-day losses so as to allow the Exchange to liquidate the position over three days. This leads to a scaling factor of square root of three for illiquid stocks. For liquid stocks, the VaR margins are based only on the volatility of the stock while for other stocks, the volatility of the market index is also used in the computation. Computation of the VaR margin requires the following definitions: Scrip sigma means the volatility of the security computed as at the end of the previous trading day. The computation uses the exponentially weighted moving average method applied to daily returns in the same manner as in the derivatives market. Scrip VaR means the higher of 7.5% or 3.5 scrip sigma.

o o o

Index sigma means the daily volatility of the market index (S&P CNX Nifty or BSE Sensex) computed as at the end of the previous trading day. The computation uses the exponentially weighted moving average method applied to daily returns in the same manner as in the derivatives market.

Index VaR means the higher of 5% or 3 index sigma. The higher of the Sensex VaR or Nifty VaR would be used for this purpose. The VaR Margins are specified as follows for different groups of stocks:

Liquidity Categorization Liquid Securities (Group I)

One-Day VaR Scrip VaR

Scaling factor for illiquidity 1.00

VaR Margin Scrip VaR

Less Liquid Higher of Scrip VaR 1.73 Higher of 1.73 times Securities (Group II) and three times Scrip VaR and 5.20 Index VaR (square root of 3.00) times Index VaR Illiquid Securities (Group III) Five times Index VaR 1.73 (square root of 3.00) 8.66 times Index VaR

Collection of VaR Margin : a. The VaR margin is collected on an upfront basis by adjusting against the total liquid assets of the Member at the time of trade. b. The VaR margin is collected on the gross open position of the Member. The gross open position for this purpose is the gross of all net positions across all the clients of a Member including his proprietary position. c. For this purpose, there would be no netting of positions across different settlements. d. Dissemination of Information : The VaR amount applicable in respect of the scrips is disseminated on the BSE website on a daily basis.

Extreme Loss Margin : The term Extreme Loss Margin replaces the terms "exposure limits" and "second line of defense" that have been used hitherto. It covers the expected loss in situations that go beyond those envisaged in the 99% value at risk estimates used in the VaR margin. e. The Extreme Loss Margin for any stock is higher of: 5%, and 1.5 times the standard deviation of daily logarithmic returns of the stock price in the last six months. This computation is done at the end of each month by taking the price data on a rolling basis for the past six months and the resulting value is applicable for the next month. f. The Extreme Loss Margin is collected/adjusted against the total liquid assets of the member on a real time basis. g. The Extreme Loss Margin is collected on the gross open position of the Member. The gross open position for this purpose means the gross of all net positions across all the clients of a member including his proprietary position. h. For this purpose, there is no netting of positions across different settlements. i. The Extreme Loss margin so collected is released alongwith the pay-in. j. Dissemination of Information : The ELM amount applicable in respect of the scrips is also disseminated on the BSE website. Special Margin : Special margin may be imposed by BSE from time to time on certain scrips as a surveillance measure and informed to the Members through notices. Mark-to-Market Margin (MTM) : a. The MTM margin is collected on the gross open position of the Member. The gross open position for this purpose would mean the gross of all net positions across all the clients of a member including his proprietary position. For this purpose, the position of a client is netted across his various securities and the positions of all the clients of a Member is grossed. Further, there is no netting across two different settlements. b. There is no netting off the positions and setoff against MTM profits across 2 rolling settlements i.e. T day and T-1 day. However, for computation of MTM profits/losses for the day, netting or setoff against MTM profits is permitted. Collection and Release of Margins

All statements pertaining to daily margins viz., VaR, MTM, ELM and Special Margin computed by BSE on the outstanding positions of the Members are available for downloading by them in their back-offices at the end of the day. o VaR Margin The VaR margin is collected on an upfront basis by adjusting against the total liquid assets of the Member at the time of trade. o

Extreme Loss Margin (ELM) The ELM is collected/ adjusted from the total liquid assets of the Member on a real time basis.

Mark-to-Market Margin (MTM) The MTM is computed after trading hours on T day on the basis of closing price, of that day. In case the security has not been traded on a particular day, the latest available closing price is considered as the closing price. MTM margins is also recomputed in respect of all the pending settlements on the basis of closing prices of T day and the difference due to increase/decrease in MTM margins on account of such recomputation is adjusted in the MTM obligation of the Member for the day. Such MTM is collected from the Members in the evening on the T day itself, first by adjusting the same from the available cash and cash equivalent component of the liquid assets and the balance MTM in form of cash from the Members through their clearing banks on the same day. Special Margins The Special Margin as applicable is collected along with MTM from the Members, first, by adjusting the same from the available liquid assets and the balance Special Margin in form of cash from the Members through their clearing banks on the same day. Release of Margins The above-referred margins are released on completion of pay-in of the settlement

Fines / Penalty for Margin Default Cases where there are insufficient balances in bank accounts of the Members at the time of debit of margin amounts payable in cash on the relevant day, are treated as margin defaults. The norms for levy of fines/ penalty for delay in clearance of margin obligations are as follows :


Late fees/fines/penalty

Non-fulfillment of In case of non-fulfillment of margin obligation, the trading margin obligations to facility of such members shall be withdrawn immediately the Exchange. and fine/penalty of 1% of the unpaid margin amount will be levied. In addition, the trading facility of the member shall be withdrawn immediately. The trading facility shall be restored after fulfillment of the margin obligation by the member.

o o Exemption from Payment of Margins The following trades executed on the BOLT are exempted from payment of margins on Trade Day. However the same are margined to the Custodians/members on T+1 day in case of acceptance / rejection of the 6A7A entry: a. Institutional business. For this purpose, institutional investors include : 1. Foreign Institutional Investors registered with SEBI. 2. Mutual Funds registered with SEBI. 3. Public Financial Institutions as defined under Section 4A of the Companies Act, 1956. 4. Banks, i.e., a banking company as defined under Section 5(1)(c) of the Banking Regulations Act, 1949. 5. Insurance companies registered with IRDA. 6. Pension Funds b. In cases where early pay-in of securities is made, the outstanding position of the client to the extent of early pay-in.

Early Pay-in Facility The early pay-in of securities done upto 3.45 p.m. on a day are considered for on-line release of blocked liquid assets on account of margins on that day. The benefits of early pay-in done after 3.45 p.m. on a day are available on the next trading day. Members are also able to do early pay-in of securities before execution of the trade on T day to avail benefit of margin exemption.

For availing the benefits of margin exemptions through early pay-in of securities, the members are required to upload a file containing details in respect of the early pay-in at client level to the Clearing House-BOISL (Notice No.20050526-20). The details in the file is matched against the transaction files received from CDSL and NSDL. Only the matched records are uploaded for Early Pay-In.

Capital Cushion Requirements SEBI has advised BSE to build an administrative mechanism to encourage members to hold capital cushions while operating in the Cash and Derivatives Segments. Accordingly, the following methodology, as advised by SEBI, is being followed by BSE: At the end of each calendar month, Members who have exceeded 90% of utilization of capital during the day for more than 7 days in the current month are identified. In the derivatives segment, the utilisation is monitored after considering initial margins, exposure margins and premium. The capital requirement to bring the utilisation to a level of 85% at the time of violating the trigger point of 90% on each of those occasions is noted for the Members. The highest of such amounts for the identified members during the month is called for as additional capital. The requirement is communicated to the members on the first day of the subsequent

month. The Members are provided a time limit of three working days to provide the amount of additional capital in the form of Cash, FDRs and Bank Guarantees only. The additional capital so collected is retained with the Clearing House for a period of one calendar month. No benefit including exposure, margin etc is available to the Member on the amount of additional capital so collected. In case of non- payment of additional capital within the stipulated time limit a penalty as applicable for funds shortage is levied on the Member for the period of default. In case a Member is liable to provide additional capital in the subsequent month, the amount of additional capital shall be recomputed and the excess /deficit is refunded /called for.

Monitoring Business of Brokers BSE closely monitors the outstanding positions of the main Members on a daily basis. For this purpose, it has developed various market monitoring reports based on certain pre-set parameters. These reports are scrutinized by officials of the Surveillance Department to ascertain whether a Member has built up excessive purchase or sale position compared to his normal level of business. Further, it is examined whether purchases or sales are concentrated in one or more scrips, whether the margin cover is adequate and whether transactions have been entered into on behalf of institutional clients. Even the quality of scrips, i.e., liquid or illiquid, is looked into in order to assess the quality of exposure. Based on an analysis of these factors, the margins already paid and the total capital deposited by the Member with BSE, an advance pay-in is called from the concerned Member. BSE also scrutinizes the pay-in position of the Members and such Members who have larger funds pay-in positions are , at the discretion of BSE, asked to make advance pay-in on the T+1 day instead of on the T+2 day. BOLT Deactivation The BOLT TWSs of a Member are deactivated for non-payment / late payment of margins or settlement dues or on apprehension of financial difficulties or on detection of serious irregularities or for frequent violations of trading restrictions. Such decisions are taken on a case-to-case basis. The overall objective in resorting to this ultimate step is to ensure that questionable trading behavior of a Member does not compromise the safety of the market or jeopardize the integrity of the market. Brokers Contingency Fund BSE operates a Brokers' Contingency Fund, since July 21, 1997 with a view to : A Member desirous of availing of an advance would be required to give a request letter in writing to the Clearing & Settlement Department of BSE stating that as and when there is a shortfall in meeting his funds pay-in obligation, BSE may automatically advance him an amount up to Rs. 10 lakhs to meet such shortfall. A Member would be eligible to avail of advance from the Fund up to a maximum of Rs 25 lakhs at any point of time. The advance would be available only for meeting shortfall in his funds payin obligations in a settlement arising out of delivery based transactions and not for any other

obligations in a settlement. The advance would be available for a maximum period of 30 days from the date of disbursement. A Member would be eligible to avail of advance from the Fund up to a maximum of six times in a financial year. The amounts advanced from the BCF would be at the following interest rates: For the first three times in a financial year @12% p.a. For the next three times in a financial year @15% p.a.

The advance may be availed of by a Member against the value of his pay-out securities (in dematerialised form only) after applying a haircut of 30%. BCF is managed by a Committee comprising of the Managing Director, Chief Operating Officer and three non-elected directors. BSE contributed Rs.9.51 crores to the corpus of this Fund. All active Members are required to make an initial non-refundable contribution of Rs.2,50,000 to the Fund. The corpus of the fund as on 31/03/08 (unaudited) is Rs. 56 crores. Members are eligible to get advances from this Fund upto a maximum of Rs.25 lakhs at the rate of 12% per annum. BCF has ensured that the settlement cycles at BSE are not affected due to the temporary financial problems faced by its Members, further strengthening the credibility of the stock exchange settlement system. Trade Guarantee Fund SEBI requires BSE to have a system of guaranteeing settlement of trades or set up a Clearing Corporation to ensure that the market equilibrium is not disturbed in case of payment default by the members. BSE has accordingly instituted a system to guarantee settlement of bonafide transactions of Members which form part of the settlement system. BSE has a Trade Guarantee Fund, in operation since May 12, 1997, with the following objectives : p. To guarantee settlement of bonafide transactions of BSE Members inter-se which form part of the Stock Exchange settlement system, so as to ensure timely completion of settlements of contracts and thereby protect the interest of investors and Members. TGF is managed by the Defaulters' Committee, which is a Standing Committee constituted by BSE, the constitution of which is approved by SEBI. The declaration of a member, who is unable to meet his settlement dues as a defaulter is a pre-condition for invoking the provisions of this Fund. BSE has contributed an initial sum of Rs.60 crores to the corpus of the Fund. All active members are required to make an initial contribution of Rs.10,000 in cash to the Fund and also contribute Re. 0.01 for every Rs.1 lakh of gross turnover in all the groups of scrips by way of continuous contribution which is debited to their settlement account in each settlement.

All active Members are required to maintain a base minimum capital of Rs.10 lakhs each with BSE. This contribution has also been transferred to the Fund and has been treated as refundable contribution of the Members. Each Member is also required to provide to the Fund a bank guarantee of Rs.10 lakhs from a scheduled commercial or co-operative bank as an additional contribution to the Fund. The present corpus, as on 31/03/2008 ( unaudited ), is Rs 181 crores (cash component excluding collaterals & additional capital) TGF has eliminated the age-old counter party risk, so that if a Member is declared a defaulter, other Members do not suffer.

Trade Guarntee Fund - G -Sec Segment In 2003, BSE had set up a distinct Trade Guarantee Fund known as GSEC Trade Guarantee Fund for trading in the Central Government Securities and such fund was created with an initial contribution of Rs. 5 crores by transferring the said amout from the free reserves of BSE The present corpus as on 31/03/08 (unaudited) is Rs.7 crores.

q. To inculcate confidence in the secondary market traders including the global investors to attract larger participation. r. To protect the interests of the investors and to promote the development and regulation of the secondary market.

make temporary refundable advance(s) to the Members facing temporary financial mismatch as a result of which they may not be in a position to meet their financial obligations to BSE in time; protect the interest of the investors dealing through the BSE Members by ensuring timely completion of settlement inculcate confidence in investors regarding safety of their bonafide transactions




Patawat Arbitration session : Arbitration 10:30 a.m. to 11:30 a.m. awards to be obtained from officials of

the Bad Delivery Cell Securities under objection to be submitted in the Clearing House. The delivering members to collect such securities under objection from the clearing house Arbitration awards for invalid objection to be obtained from members of the Arbitration Review Committee/officials of the Bad Delivery Cell. T+4 Members and institution to submit rectified securities, confirmation forms and invalid objections in the clearing house. Rectified securities/invalid objections will be delivered to the receiving members T+5 11:00 a.m. to 12:00 noon 2:00 p.m. to 3:00 p.m.

5:00 p.m. to 5:30 p.m.

1:00 p.m. to 2:00 p.m.

3:00 p.m. to 4:00 p.m.

Arbitration Awards for invalid 11:30 a.m. to 12:30 p.m. rectification to be obtained from officials of the Bad Delivery Cell Securities to be lodged with the clearing house unto 1:00 p.m

The transactions pertaining to un-rectified and invalid rectification of securities are directly closed-out by BSE as per the formula. The shares in physical form returned under objection to the Clearing House as explained earlier are required to be accompanied by an arbitration award (Chukada) except in certain cases where the receiving Members are permitted to submit securities to the Clearing House without "Chukada" or arbitration award in the following cases:

Primary market
The primary market is that part of the capital markets that deals with the issuance of new securities. Companies, governments or public sector institutions can obtain funding through the sale of a new stock or bond issue. This is typically done through a syndicate of securities dealers. The process of selling new issues to investors is called underwriting. In the case of a new stock issue, this sale is an initial public offering (IPO). Dealers earn a commission that is built into the price of the security offering, though it can be found in the prospectus. Primary markets create long term instruments through which corporate entities borrow from capital market. Features of primary markets are:

This is the market for new long term equity capital. The primary market is the market where the securities are sold for the first time. Therefore it is also called the new issue market (NIM). In a primary issue, the securities are issued by the company directly to investors. The company receives the money and issues new security certificates to the investors. Primary issues are used by companies for the purpose of setting up new business or for expanding or modernizing the existing business. The primary market performs the crucial function of facilitating capital formation in the economy. The new issue market does not include certain other sources of new long term external finance, such as loans from financial institutions. Borrowers in the new issue market may be raising capital for converting private capital into public capital; this is known as "going public." The financial assets sold can only be redeemed by the original holder.

Methods of issuing securities in the primary market are:

Initial public offering; Rights issue (for existing companies); Preferential issue.

Secondary market
The secondary market, also called aftermarket, is the financial market in which previously issued financial instruments such as stock, bonds, options, and futures are bought and sold.[1]. Another frequent usage of "secondary market" is to refer to loans which are sold by a mortgage bank to investors such as Fannie Mae and Freddie Mac. The term "secondary market" is also used to refer to the market for any used goods or assets, or an alternative use for an existing product or asset where the customer base is the second market (for example, corn has been traditionally used primarily for food production and feedstock, but a "second" or "third" market has developed for use in ethanol production). With primary issuances of securities or financial instruments, or the primary market, investors purchase these securities directly from issuers such as corporations issuing shares in an IPO or private placement, or directly from the federal government in the case of treasuries. After the initial issuance, investors can purchase from other investors in the secondary market. The secondary market for a variety of assets can vary from loans to stocks, from fragmented to centralized, and from illiquid to very liquid. The major stock exchanges are the most visible example of liquid secondary markets - in this case, for stocks of publicly traded companies. Exchanges such as the New York Stock Exchange, Nasdaq and the American Stock Exchange provide a centralized, liquid secondary market for the investors who own stocks that trade on those exchanges. Most bonds and structured products trade over the counter, or by phoning the bond desk of ones broker-dealer. Loans sometimes trade online using a Loan Exchange.

Secondary marketing is vital to an efficient and modern capital market.[citation needed] In the secondary market, securities are sold by and transferred from one investor or speculator to another. It is therefore important that the secondary market be highly liquid (originally, the only way to create this liquidity was for investors and speculators to meet at a fixed place regularly; this is how stock exchanges originated, see History of the Stock Exchange). As a general rule,

the greater the number of investors that participate in a given marketplace, and the greater the centralization of that marketplace, the more liquid the market. Fundamentally, secondary markets mesh the investor's preference for liquidity (i.e., the investor's desire not to tie up his or her money for a long period of time, in case the investor needs it to deal with unforeseen circumstances) with the capital user's preference to be able to use the capital for an extended period of time. Accurate share price allocates scarce capital more efficiently when new projects are financed through a new primary market offering, but accuracy may also matter in the secondary market because: 1) price accuracy can reduce the agency costs of management, and make hostile takeover a less risky proposition and thus move capital into the hands of better managers, and 2) accurate share price aids the efficient allocation of debt finance whether debt offerings or institutional borrowing.

Related usage
The term may refer to markets in things of value other than securities. For example, the ability to buy and sell intellectual property such as patents, or rights to musical compositions, is considered a secondary market because it allows the owner to freely resell property entitlements issued by the government. Similarly, secondary markets can be said to exist in some real estate contexts as well (e.g. ownership shares of time-share vacation homes are bought and sold outside of the official exchange set up by the time-share issuers). These have very similar functions as secondary stock and bond markets in allowing for speculation, providing liquidity, and financing through securitization.1) to facilitate liquidity marketability of long term instrument. 2)to provide instant valuation of securities caused by changes in the enivironment.

Private Secondary Markets

Partially due to increased compliance and reporting obligations enacted in the Sarbanes-Oxley Act of 2002, private secondary markets began to emerge. These markets are generally only available to institutional or accredited investors and allow trading of unregistered and private company securities. In private equity, the secondary market (also often called private equity secondaries or secondaries) refers to the buying and selling of pre-existing investor commitments to private equity funds. Sellers of private equity investments sell not only the investments in the fund but also their remaining unfunded commitments to the funds.

How to list a company in Bombay stock Market

Listing means admission of securities to dealings on a recognised stock exchange. The securities may be of any public limited company, Central or State Government, quasi governmental and other financial institutions/corporations, municipalities, etc. The objectives of listing are mainly to : provide liquidity to securities; mobilize savings for economic development; protect interest of investors by ensuring full disclosures.

The BSE Limited has a dedicated Listing Department to grant approval for listing of securities of companies in accordance with the provisions of the Securities Contracts (Regulation) Act, 1956, Securities Contracts (Regulation) Rules, 1957, Companies Act, 1956, Guidelines issued by SEBI and Rules, Bye-laws and Regulations of BSE. BSE has set various guidelines and forms that need to be adhered to and submitted by the companies. These guidelines will help companies to expedite the fulfillment of the various formalities and disclosure requirements that are required at various stages of Public Issues o Initial Public Offering o Further Public Offering Preferential Issues Indian Depository Receipts Amalgamation Qualified Institutions Placements

A company intending to have its securities listed on BSE has to comply with the listing requirements prescribed by it. Some of the requirements are as under : I II Minimum Listing Requirements for New Companies Minimum Requirements for Companies Delisted by BSE seeking relisting on BSE


Permission to Use the Name of BSE in an Issuer Company's Prospectus Submission of Letter of Application Allotment of Securities Trading Permission

VII Requirement of 1% Security VIII Payment of Listing Fees IX X Compliance with the Listing Agreement Cash Management Services (CMS) - Collection of Listing Fees

[I] Minimum Listing Requirements for New Companies The following eligibility criteria have been prescribed effective August 1, 2006 for listing of companies on BSE, through Initial Public Offerings (IPOs) & Follow-on Public Offerings (FPOs):

1. Companies have been classified as large cap companies and small cap companies. A large cap
company is a company with a minimum issue size of Rs. 10 crore and market capitalization of not less than Rs. 25 crore. A small cap company is a company other than a large cap company.

a. In respect of Large Cap Companies i. ii. iii.

The minimum post-issue paid-up capital of the applicant company (hereinafter referred to as "the Company") shall be Rs. 3 crore; and The minimum issue size shall be Rs. 10 crore; and The minimum market capitalization of the Company shall be Rs. 25 crore (market capitalization shall be calculated by multiplying the post-issue paid-up number of equity shares with the issue price).

b. In respect of Small Cap Companies i. ii. iii. iv. v. vi.

The minimum post-issue paid-up capital of the Company shall be Rs. 3 crore; and The minimum issue size shall be Rs. 3 crore; and The minimum market capitalization of the Company shall be Rs. 5 crore (market capitalization shall be calculated by multiplying the post-issue paid-up number of equity shares with the issue price); and The minimum income/turnover of the Company shall be Rs. 3 crore in each of the preceding three 12-months period; and The minimum number of public shareholders after the issue shall be 1000. A due diligence study may be conducted by an independent team of Chartered Accountants or Merchant Bankers appointed by BSE, the cost of which will be borne by the company. The requirement of a due diligence study may be waived if a financial institution or a scheduled commercial bank has appraised the project in the preceding 12 months.

2. For all companies : a. In respect of the requirement of paid-up capital and market capitalization, the issuers
shall be required to include in the disclaimer clause forming a part of the offer document that in the event of the market capitalization (product of issue price and the post issue number of shares) requirement of BSE not being met, the securities of the issuer would not be listed on BSE. b. The applicant, promoters and/or group companies, shall not be in default in compliance of the listing agreement. c. The above eligibility criteria would be in addition to the conditions prescribed under SEBI (Disclosure and Investor Protection) Guidelines, 2000.

[II] Minimum Requirements for Companies Delisted by BSE seeking Relisting on BSE Companies delisted by BSE and seeking relisting at BSE are required to make a fresh public offer and comply with the extant guidelines of SEBI and BSE regarding initial public offerings.

[III] Permission to Use the Name of BSE in an Issuer Company's Prospectus Companies desiring to list their securities offered through a public issue are required to obtain prior permission of BSE to use the name of BSE in their prospectus or offer for sale documents before filing the same with the concerned office of the Registrar of Companies. BSE has a Listing Committee , comprising of market experts, which decides upon the matter of granting permission to companies to use the name of BSE in their prospectus/offer documents. This Committee evaluates the promoters, company, project , financials, risk factors and several other aspects before taking a decision in this regard. Decision with regard to some types/sizes of companies has been delegated to the Internal Committee of BSE. [IV] Submission of Letter of Application As per Section 73 of the Companies Act, 1956, a company seeking listing of its securities on BSE is required to submit a Letter of Application to all the stock exchanges where it proposes to have its securities listed before filing the prospectus with the Registrar of Companies. [V] Allotment of Securities As per the Listing Agreement, a company is required to complete the allotment of securities offered to the public within 30 days of the date of closure of the subscription list and approach the Designated Stock Exchange for approval of the basis of allotment. In case of Book Building issues, allotment shall be made not later than 15 days from the closure of the issue, failing which interest at the rate of 15% shall be paid to the investors.

[VI] Trading Permission As per SEBI Guidelines, an issuer company should complete the formalities for trading at all the stock exchanges where the securities are to be listed within 7 working days of finalization of the basis of allotment. A company should scrupulously adhere to the time limit specified in SEBI (Disclosure and Investor Protection) Guidelines 2000 for allotment of all securities and dispatch of allotment letters/share certificates/credit in depository accounts and refund orders and for obtaining the listing permissions of all the exchanges whose names are stated in its prospectus or offer document. In the event of listing permission to a company being denied by any stock exchange where it had applied for listing of its securities, the company cannot proceed with the allotment of shares. However, the company may file an appeal before SEBI under Section 22 of the Securities Contracts (Regulation) Act, 1956.

[VII] Requirement of 1% Security Companies making public/rights issues are required to deposit 1% of the issue amount with the Designated Stock Exchange before the issue opens. This amount is liable to be forfeited in the event of the company not resolving the complaints of investors regarding delay in sending refund orders/share certificates, non-payment of commission to underwriters, brokers, etc. [VIII] Payment of Listing Fees All companies listed on BSE are required to pay to BSE the Annual Listing Fees by 30th April of every financial year as per the Schedule of Listing Fees prescribed from time to time. The schedule of Listing Fees for the year 2011-12, is given here under: Securities *other than Privately Placed Debt Securities and Mutual Funds Sr. No. 1 2 (i) (ii) (iii) (iv) Particulars Initial Listing Fees Annual Listing Fees Upto Rs. 5 Crs. Rs.5 Crs. To Rs.10 Crs. Rs.10 Crs. To Rs.20 Crs. Rs.20 Crs. To Rs.30 Crs. Rs. 15,000/Rs. 25,000/Rs. 40,000/Rs. 60,000/Rs. 70,000/plus Rs. 2,500/- for every increase of Rs. 5 crs or part thereof above Rs. 30 crs. Amount Rs. 20,000/-


Rs.30 Crs. To Rs.100 Crs.


Rs.100 Crs. to Rs.500 Crs.

Rs. 125,000/plus Rs. 2,500/- for every increase of Rs. 5 crs or part thereof above Rs. 100 crs. Rs. 375,000/plus Rs. 2,500/- for every increase of Rs. 5 crs or part thereof above Rs. 500 crs. Rs. 625,000/plus Rs. 2,750/- for every increase of Rs. 5 crs or part thereof above Rs. 1000 crs.


Rs.500 Crs. to Rs.1000 Crs.


Above Rs. 1000 Crs.

Note: In case of debenture capital (not convertible into equity shares), the fees will be 75% of the above fees.

* includes equity shares, preference shares, indian depository receipts, fully convertible debentures, partly convertible debentures and any other security convertible into equity shares.

Privately Placed Debt Securities Sr. No. Particulars 1 2 (i) (ii) (iii) Initial Listing Fees Annual Listing Fees Issue size up to Rs.5 Crs. Above Rs.5 Crs. and up to Rs.10 Crs. Above Rs.10 Crs. and up to Rs.20 Crs. Rs. 2,500/Rs. 3,750/Rs. 7,500/Rs. 7,500/- plus Rs. 200/- for every increase Rs.1 Cr. or part thereof above Rs.20 crs. Subject to a maximum of Rs.30,000/- per instrument. Amount NIL


Above Rs.20 Crs.

Note: Cap on the annual listing fee of debt instruments per issuer is Rs.5,00,000/- per annum.

Mutual Funds Sl. No. 1 Particulars Initial Listing Fees Annual Listing Fee for tenure of the scheme Issue size up to Rs.50 Crs. Above Rs.50 Crs.and up to Rs.100 Crs. Above Rs.100 Crs.and up to Rs.300 Crs. Above Rs.300 Crs.and up to Rs.500 Crs. Amount (Rs.) NIL

Payable per 'month or part thereof'

i. ii. iii. iv. v. vi Note:


Above Rs.500 Crs.and up to Rs. 1000 Crs. Rs.9,800/Above 1000 Crs. Rs.15,600/-

1. For tenure beyond One month, fees are payable for one month or any part thereof.

2. Asset Under Management (AUM) of all such listed schemes of the Fund House exceed Rs. 10,000 crs, discount o 10% will be offered on future annual listing fees for all listed schemes of that Fund House. For eligibility of 10% discount on listing fees, the corpus of AUM will be taken as on March 31st of every year.

APPLICABILITY The above schedule of Listing Fee is uniformly applicable for all companies irrespective of whether BSE is the designated stock exchange or not. PAYMENT DATE The last date for payment of Listing Fee for the year 2011-12 is April 30, 2011. Failure to pay the Listing Fee (for equity debt segment and/or Mutual Fund) by the due date will attract interest @ 12% per annum w.e.f. May 1, 2011. SERVICE TAX

Service Tax is payable on the listing fee at the applicable rates. [IX] Compliance with the Listing Agreement Companies desirous of getting their securities listed at BSE are required to enter into an agreement with BSE called the Listing Agreement, under which they are required to make certain disclosures and perform certain acts, failing which the company may face some disciplinary action, including suspension/delisting of securities. As such, the Listing Agreement is of great importance and is executed under the common seal of a company. Under the Listing Agreement, a company undertakes, amongst other things, to provide facilities for prompt transfer, registration, sub-division and consolidation of securities; to give proper notice of closure of transfer books and record dates, to forward 6 copies of unabridged Annual Reports, Balance Sheets and Profit and Loss Accounts to BSE, to file shareholding patterns and financial results on a quarterly basis; to intimate promptly to the Exchange the happenings which are likely to materially affect the financial performance of the Company and its stock prices, to comply with the conditions of Corporate Governance, etc. The Listing Department of BSE monitors the compliance by the companies with the provisions of the Listing Agreement, especially with regard to timely payment of annual listing fees, submission of results, shareholding patterns and corporate governance reports on a quarterly basis . Penal action is taken against the defaulting companies.

In order to simplify the system of payment of listing fees, BSE has entered into an arrangement with HDFC Bank for collection of listing fees from 141 locations all over the country.Details of the HDFC Bank branches are available on our website site www.bseindia.com as well as on the HDFC Bank website www.hdfcbank.com This facility is being provided free of cost. Companies intending to utilize this facility for payment of listing fee should furnish the information (as mentioned below) in the Cash Management Cash Deposit Slip. These slips are available at all the HDFC Bank branch [X] Cash Management Services (CMS) - Collection of Listing Fees

1. 2. 3. 4. 5. Client Name Client Code Cheque No. Date Drawer

BSE Limited BSELIST mention the cheque No & date date on which payment is being deposited with the bank. state the name of the company and the company code No.The last digits mentioned in the Ref. No. on the Bill is the company code No.e.g If the Ref. No in the Bill is mentioned as : Listing/Alf-

Bill/2004- 2005/4488, then the code No of that company is 4488 6. Drawee Bank state the bank on which cheque is drawn Drawn Location Pickup Location No. of Insts on


Mention the location of the drawee bank.


Not applicable


Not applicable

The cheque should be drawn in favour of BSE Limited , and should be payable locally. Companies are requested to mention in the deposit slip, the financial year(s) for which the listing fee is being paid. Payment made through any other slips would not be considered. The above slips will have to be filled in quadruplicate. One acknowledged copy would be provided to the depositor by the HDFC Bank.

SENSEX - The Barometer of Indian Capital Markets

Introduction SENSEX, first compiled in 1986, was calculated on a "Market Capitalization-Weighted" methodology of 30 component stocks representing large, well-established and financially sound companies across key sectors. The base year of SENSEX was taken as 1978-79. SENSEX today is widely reported in both domestic and international markets through print as well as electronic media. It is scientifically designed and is based on globally accepted construction and review methodology. Since September 1, 2003, SENSEX is being calculated on a free-float market capitalization methodology. The "free-float market capitalization-weighted" methodology is a widely followed index construction methodology on which majority of global equity indices are based; all major index providers like MSCI, FTSE, STOXX, S&P and Dow Jones use the free-float methodology. The growth of the equity market in India has been phenomenal in the present decade. Right from early nineties, the stock market witnessed heightened activity in terms of various bull and bear runs. In the late nineties, the Indian market witnessed a huge frenzy in the 'TMT' sectors. More recently, real estate caught the fancy of the investors. SENSEX has captured all these happenings in the most judicious manner. One can identify the booms and busts of the Indian equity market through SENSEX. As the oldest index in the country, it provides the time series data over a fairly long period of time (from 1979 onwards). Small wonder, the SENSEX has become one of the most prominent brands in the country. Index Specification:

Base Year Base Index Value Date of Launch

1978-79 100 01-01-1986

Method of calculation Launched on full market capitalization method and effective September 01, 2003, calculation method shifted to free-float market capitalization. Number of scrips Index Constituents Index calculation frequency Index calculation and Maintenance Index Reach 30 Click here for list of constituents Real Time Click here for Index calculation and maintenance Click here for scrip-wise, sector wise market capitalization, weightage etc.

Market Capitalization Click here for market capitalization and turnover coverage

and Turnover Coverage Historical Values of Index Historical Notices Historical Replacements Index, Price Earnings, Price to Book Value ratio and Dividend Yield % Click to search Historical Notices on Index Replacements Click here for historical replacements

SENSEX Calculation Methodology SENSEX is calculated using the "Free-float Market Capitalization" methodology, wherein, the level of index at any point of time reflects the free-float market value of 30 component stocks relative to a base period. The market capitalization of a company is determined by multiplying the price of its stock by the number of shares issued by the company. This market capitalization is further multiplied by the free-float factor to determine the free-float market capitalization. The base period of SENSEX is 1978-79 and the base value is 100 index points. This is often indicated by the notation 1978-79=100. The calculation of SENSEX involves dividing the free-float market capitalization of 30 companies in the Index by a number called the Index Divisor. The Divisor is the only link to the original base period value of the SENSEX. It keeps the Index comparable over time and is the adjustment point for all Index adjustments arising out of corporate actions, replacement of scrips etc. During market hours, prices of the index scrips, at which latest trades are executed, are used by the trading system to calculate SENSEX on a continuous basis. Dollex-30 BSE also calculates a dollar-linked version of SENSEX and historical values of this index are available since its inception. (For more details click 'Dollex series of BSE indices') SENSEX - Scrip Selection Criteria
1. Equities of companies listed on Bombay Stock Exchange Ltd. (excluding companies classified in Z group, listed mutual funds, scrips suspended on the last day of the month prior to review date, scrips objected by the Surveillance department of the Exchange and those that are traded under permitted category) shall be considered eligible 2. Listing History: The scrip should have a listing history of at least three months at BSE. An exception may be granted to one month, if the average free-float market capitalization of a newly listed company ranks in the top 10 of all companies listed at BSE. In the event that a company is listed on account of a merger / demerger / amalgamation, a minimum listing history is not required. 3. The scrip should have been traded on each and every trading day in the last three months at BSE. Exceptions can be made for extreme reasons like scrip suspension etc. Companies that have reported revenue in the latest four quarters from its core activity are considered eligible.


5. From the list of constituents selected through Steps 1-4, the top 75 companies based on free-float market capitalisation (avg. 3 months) are selected as well as any additional companies that are in the top 75 based on full market capitalization (avg. 3 months).

6. The filtered list of constituents selected through Step 5 (which can be greater than 75 companies) is then ranked on absolute turnover (avg. 3 months). 7. Any company in the filtered, sorted list created in Step 6 that has Cumulative Turnover of >98%, are excluded, so long as the remaining list has more than 30 scrips.

8. The filtered list calculated in Step 7 is then sorted by free float market capitalization. Any company having a weight within this filtered constituent list of <0.50% shall be excluded 9. All remaining companies will be sorted on sector and sub-sorted in the descending order of rank on free-float market capitalization. 10. Industry/Sector Representation: Scrip selection will generally attempt to maintain index sectoral weights that are broadly in-line with the overall market. 11. Track Record: In the opinion of the BSE Index Committee, all companies included within the SENSEX should have an acceptable track record.

Note: If an existing constituent is traded under the ex-entitlement basis it will be excluded from all BSE Indices. This is done because during this period BSE is unable to ascertain the valuation of the constituent and valuation of a constituent is required for Index Calcualtion. Upon relisting or from ex-entitlement, the company becomes part of the regular stock universe that can be considered for inclusion in the Index. Understanding Free-float Methodology Concept Free-float methodology refers to an index construction methodology that takes into consideration only the free-float market capitalization of a company for the purpose of index calculation and assigning weight to stocks in the index. Free-float market capitalization takes into consideration only those shares issued by the company that are readily available for trading in the market. It generally excludes promoters' holding, government holding, strategic holding and other locked-in shares that will not come to the market for trading in the normal course. In other words, the market capitalization of each company in a free-float index is reduced to the extent of its readily available shares in the market. Subsequently all BSE indices with the exception of BSE-PSU index have adopted the free-float methodology. Major advantages of Free-float Methodology A Free-float index reflects the market trends more rationally as it takes into consideration only those shares that are available for trading in the market. Free-float Methodology makes the index more broad-based by reducing the concentration of top few companies in Index. A Free-float index aids both active and passive investing styles. It aids active managers by enabling them to benchmark their fund returns vis- -vis an investible index. This enables an apple-to-apple comparison thereby facilitating better evaluation of performance of active

managers. Being a perfectly replicable portfolio of stocks, a Free-float adjusted index is best suited for the passive managers as it enables them to track the index with the least tracking error. Free-float Methodology improves index flexibility in terms of including any stock from the universe of listed stocks. This improves market coverage and sector coverage of the index. For example, under a Full-market capitalization methodology, companies with large market capitalization and low free-float cannot generally be included in the Index because they tend to distort the index by having an undue influence on the index movement. However, under the Free-float Methodology, since only the free-float market capitalization of each company is considered for index calculation, it becomes possible to include such closely-held companies in the index while at the same time preventing their undue influence on the index movement. Globally, the Free-float Methodology of index construction is considered to be an industry best practice and all major index providers like MSCI, FTSE, S&P and STOXX have adopted the same. MSCI, a leading global index provider, shifted all its indices to the Free-float Methodology in 2002. The MSCI India Standard Index, which is followed by Foreign Institutional Investors (FIIs) to track Indian equities, is also based on the Free-float Methodology. NASDAQ-100, the underlying index to the famous Exchange Traded Fund (ETF) - QQQ is based on the Free-float Methodology.

Definition of Free-float Shareholding of investors that would not, in the normal course come into the open market for trading are treated as 'Controlling/ Strategic Holdings' and hence not included in free-float. Specifically, the following categories of holding are generally excluded from the definition of Free-float: Shares held by founders/directors/ acquirers which has control element Shares held by persons/ bodies with "Controlling Interest" Shares held by Government as promoter/acquirer Holdings through the FDI Route Strategic stakes by private corporate bodies/ individuals Equity held by associate/group companies (cross-holdings) Equity held by Employee Welfare Trusts Locked-in shares and shares which would not be sold in the open market in normal course.

The remaining shareholders fall under the Free-float category. Determining Free-float Factors of Companies BSE has designed a Free-float format, which is filled and submitted by all index companies on a quarterly basis. (Format available on www.bseindia.com). BSE determines the Free-float factor for each company based on the detailed information submitted by the companies in the prescribed format. Free-float factor is a multiple with which the total market capitalization of a company is adjusted to arrive at the Free-float

market capitalization. Once the Free-float of a company is determined, it is rounded-off to the higher multiple of 5 and each company is categorized into one of the 20 bands given below. A Free-float factor of say 0.55 means that only 55% of the market capitalization of the company will be considered for index calculation. Free-float Bands: % Free-Float >0 - 5% >5 - 10% >10 - 15% >15 - 20% >20 - 25% >25 - 30% >30 - 35% >35 - 40% >40 - 45% >45 - 50% Index Closure Algorithm The closing SENSEX on any trading day is computed taking the weighted average of all the trades on SENSEX constituents in the last 30 minutes of trading session. If a SENSEX constituent has not traded in the last 30 minutes, the last traded price is taken for computation of the Index closure. If a SENSEX constituent has not traded at all in a day, then its last day's closing price is taken for computation of Index closure. The use of Index Closure Algorithm prevents any intentional manipulation of the closing index value. Maintenance of SENSEX One of the important aspects of maintaining continuity with the past is to update the base year average. The base year value adjustment ensures that replacement of stocks in Index, additional issue of capital and other corporate announcements like 'rights issue' etc. do not destroy the historical value of the index. The beauty of maintenance lies in the fact that adjustments for corporate actions in the Index should not per se affect the index values. The BSE Index Cell does the day-to-day maintenance of the index within the broad index policy framework set by the BSE Index Committee. The BSE Index Cell ensures that SENSEX and all the other BSE indices maintain their benchmark properties by striking a delicate balance between frequent replacements in index and maintaining its historical continuity. The BSE Index Committee comprises of capital market expert, fund managers, market participants and members of the BSE Governing Board. On-Line Computation of the Index During trading hours, value of the Index is calculated and disseminated on real time basis. This is done automatically on the basis of prices at which trades in Index constituents are executed. Free-Float Factor 0.05 0.10 0.15 0.20 0.25 0.30 0.35 0.40 0.45 0.50 % Free-Float >50 - 55% >55 - 60% >60 - 65% >65 - 70% >70 - 75% >75 - 80% >80 - 85% >85 - 90% >90 - 95% >95 - 100% Free-Float Factor 0.55 0.60 0.65 0.70 0.75 0.80 0.85 0.90 0.95 1.00

Adjustment for Bonus, Rights and Newly Issued Capital SENSEX calculation needs to be adjusted for issue of Bonus or Rights shares If no adjustments were made, a discontinuity would arise between the current value of the index and its previous value despite the non-occurrence of any economic activity of substance. At the BSE Index Cell , the base value is adjusted, which is used to alter market capitalization of the component stocks to arrive at the SENSEX value. The BSE Index Cell keeps a close watch on the events that might affect the index on a regular basis and carries out daily maintenance of all BSE Indices. Adjustments for Rights Issues When a company, included in the compilation of the index, issues right shares, the free-float market capitalization of that company is increased by the number of additional shares issued based on the theoretical (ex-right) price. An offsetting or proportionate adjustment is then made to the Base Market capitalization (see 'Base Market capitalization Adjustment' below). Adjustments for Bonus Issue When a company, included in the compilation of the index, issues bonus shares, the market capitalization of that company does not undergo any change. Therefore, there is no change in the Base Market capitalization, only the 'number of shares' in the formula is updated. Other Issues Base Market capitalization adjustment is required when new shares are issued by way of conversion of debentures, mergers, spin-offs etc. or when equity is reduced by way of buy-back of shares, corporate restructuring etc. Base Market capitalization Adjustment

The formula for adjusting the Base Market capitalization is as follows: New Market capitalization New Base Market capitalization = Old Base Market capitalization x --------------------------------------Old Market capitalization To illustrate, suppose a company issues right shares which increases the market capitalization of the shares of that company by say, Rs.100 crores. The existing Base Market capitalization (Old Base Market capitalization), say, is Rs.2450 crores and the aggregate market capitalization of all the shares included in the index before the right issue is made is, say Rs.4781 crore. The "New Base Market capitalization " will then be:

This figure of Rs. 2501.24 crore will be used as the Base Market capitalization for calculating the index number from then onwards till the next base change becomes necessary. Index Review Frequency The BSE Index Committee meets every quarter to discuss index related issues. In case of a revision in the Index constituents, the announcement of the incoming and outgoing scrips is made six weeks in advance of the actual implementation of the revision of the Index.

Case study
Harshad Mehta was an Indian stockbroker caught in a scandal beginning in 1992. He died of a massive heart attack in 2001, while the legal issues were still being litigated. Early life Harshad Shantilal Mehta was born in a Gujarati jain family of modest means. His father was a small businessman. His mother's name was Rasilaben Mehta. His early childhood was spent in the industrial city of Bombay. Due to indifferent health of Harshads father in the humid environs of Bombay, the family shifted their residence in the mid-1960s to Raipur, then in Madhya Pradesh and currently the capital of Chattisgarh state. An Amul advertisement of 1999 during the conterversy over MUL saying it as "The Big Bhool" (Bhool in Hindi means Blunder) He studied at the Holy Cross High School, located at Byron Bazaar. After completing his secondary education Harshad left for Bombay. While doing odd jobs he joined Lala Lajpat Rai College for a Bachelors degree in Commerce. After completing his graduation, Harshad Mehta started his working life as an employee of the New India Assurance Company. During this period his family relocated to Bombay and his brother Ashwin Mehta started to pursue graduation course in law at Lala Lajpat Rai College. His youngest brother Hitesh is a practising surgeon at the B.Y.L.Nair Hospital in Bombay. After his graduation Ashwin joined (ICICI) Industrial Credit and Investment Corporation of India. They had rented a small flat in Ghatkopar for living. In the late seventies every evening Harshad and Ashwin started to analyze tips generated from respective offices and from cyclostyled investment letters, which had made their appearance during that time. In the early eighties he quit his job and sought a job with stock broker P. Ambalal affiliated to Bombay Stock Exchange (BSE) before becoming a jobber on BSE for stock broker P.D. Shukla. In 1981 he became a sub-broker for stock brokers J.L. Shah and Nandalal Sheth. After a while he was unable to sustain his overbought positions and decided to pay his dues by selling his house with consent of his mother Rasilaben and brother Ashwin. The next day Harshad went to his brokers and offered the papers of the house as guarantee. The brokers Shah and Sheth were moved by his gesture and gave him sufficient time to overcome his position. After he came out of this big struggle for survival he became stronger and his brother quit his job to team with Harshad to start their venture GrowMore Research and Asset Management Company Limited. While a brokers card at BSE was being auctioned, the company made a bid for the same with financial assistance from Shah and Sheth, who were Harshad's previous broker mentors. He rose and survived the bear runs, this earned him the nickname of the Big Bull of the trading floor, and his actions, actual or perceived, decided the course of the movement of the Sensex as well as scrip-specific activities. By the end of eighties the media started projecting him as "Stock Market Success", "Story of Rags to Riches" and he too started to fuel his own publicity. He felt proud of this accomplishments and showed off his success to journalists through his mansion "Madhuli", which included a billiards room, mini theatre and nine hole golf course. His brand new Toyota Lexus and a fleet of cars gave credibility to his show off. This in no time made him the nondescript broker to super star of financial world. During his heyday, in the early 1990s, Harshad Mehta commanded a large resource of funds and finances as well as personal wealth. The fall In April 1992, the Indian stock market crashed, and Harshad Mehta, the person who was all along considered as the architect of the bull run was blamed for the crash. It transpired that he had manipulated the Indian banking systems to siphon off the funds from the banking system, and used the liquidity to build large positions in a select group of stocks. When the scam broke out, he was called upon by the banks and the financial institutions to return the funds, which in turn set into motion a chain reaction, necessitating liquidating and exiting from the positions which he had built in various stocks. The panic reaction ensued, and the stock market reacted and crashed within days.He was arrested on June 5, 1992 for his role in the scam. His favorite stocks included ACC Apollo Tyres Reliance Tata Iron and Steel Co. (TISCO) BPL Sterlite Videocon.

The extent The Harshad Mehta induced security scam, as the media sometimes termed it, adversely affected at least 10 major commercial banks of India, a number of foreign banks operating in India, and the National Housing Bank, a subsidiary of the Reserve Bank of India, which is the central bank of India. As an aftermath of the shockwaves which engulfed the Indian financial sector, a number of people holding key positions in the India's financial sector were adversely affected, which included arrest and sacking of K. M. Margabandhu, then CMD of the UCO Bank; removal from office of V. Mahadevan, one of the Managing Directors of Indias largest bank, the State Bank of India. The end The Central Bureau of Investigation which is Indias premier investigative agency, was entrusted with the task of deciphering the modus operandi and the ramifications of the scam. Harshad Mehta was arrested and investigations continued for a decade. During his judicial custody, while he was in Thane Prison, Mumbai, he complained of chest pain, and was moved to a hospital, where he died on 31st December 2001. His death remains a mystery. Some believe that he was murdered ruthlessly by an underworld nexus (spanning several South Asian countries including Pakistan). Rumour has it that they suspected that part of the huge wealth that Harshad Mehta commanded at the height of the 1992 scam was still in safe hiding and thought that the only way to extract their share of the 'loot' was to pressurise Harshad's family by threatening his very existence. In this context, it might be noteworthy that a certain criminal allegedly connected with this nexus had inexplicably surrendered just days after Harshad was moved to Thane Jail and landed up in imprisonment in the same jail, in the cell next to Harshad Mehta's. Mumbai: Just as the year 2001 was coming to an end, Harshad Shantilal Mehta, boss of Growmore Research and Asset Management, died of a massive heart attack in a jail in Thane. And thus came to an end the life of a man who is probably the most famous character ever to have emerged from the Indian stock market. In the book, The Great Indian Scam: Story of the missing Rs 4,000 crore, Samir K Barua and Jayanth R Varma explain how Harshad Mehta pulled off one of the most audacious scams in the history of the Indian stock market. Harshad Shantilal Mehta was born in a Gujarati Jain family of modest means. His early childhood was spent in Mumbai where his father was a small-time businessman. Later, the family moved to Raipur in Madhya Pradesh after doctors advised his father to move to a drier place on account of his indifferent health. But Raipur could not hold back Mehta for long and he was back in the city after completing his schooling, much against his fathers wishes. Mehta first started working as a dispatch clerk in the New India Assurance Company. Over the years, he got interested in the stock markets and along with brother Ashwin, who by then had left his job with the Industrial Credit and Investment Corporation of India, started investing heavily in the stock market. As they learnt the ropes of the trade, they went from boom to bust a couple of times and survived. Mehta gradually rose to become a stock broker on the Bombay Stock Exchange, who did very well for himself. At his peak, he lived almost like a movie star in a 15,000 square feet house, which had a swimming pool as well as a golf patch. He also had a taste for flashy cars, which ultimately led to his downfall. Newsmakers of the week: View Slideshow The year was 1990. Years had gone by and the driving ambitions of a young man in the faceless crowd had been realised. Harshad Mehta was making waves in the stock market. He had been buying shares heavily since the beginning of 1990. The shares which attracted attention were those of Associated Cement Company (ACC), write the authors. The price of ACC was bid up to Rs 10,000. For those who asked, Mehta had the replacement cost theory as an explanation. The theory basically argues that old companies should be valued on the basis of the amount of money which would be required to create another such company. Through the second half of 1991, Mehta was the darling of the business media and earned the sobriquet of the Big Bull, who was said to have started the bull run. But, where was Mehta getting his endless supply of money from? Nobody had a clue. On April 23, 1992, journalist Sucheta Dalal in a column in The Times of India, exposed the dubious ways of Harshad Metha. The broker was dipping illegally into the banking system to finance his buying. In 1992, when I broke the story about the Rs 600 crore that he had swiped from the State Bank of India, it was his visits to the banks headquarters in a flashy Toyota Lexus that was the tip-off. Those days, the Lexus had just been launched in the international market and importing it cost a neat package, Dalal wrote in one of her columns later. The authors explain: The crucial mechanism through which the scam was effected was the ready forward (RF) deal. The RF is in essence a secured short-term (typically 15-day) loan from one bank to another. Crudely put, the bank lends against government securities just as a pawnbroker lends against jewellery.The borrowing bank actually sells the securities to the lending bank and buys them back at the end of the period of the loan, typically at a slightly higher price. It was this ready forward deal that Harshad Mehta and his cronies used with great success to channel money from the banking system. A typical ready forward deal involved two banks brought together by a broker in lieu of a commission. The broker handles neither the cash nor the securities, though that wasnt the case in the lead-up to the scam. In this settlement process, deliveries of securities and payments were made through the broker. That is, the seller handed over the securities to the broker, who passed them to the buyer, while the buyer gave the cheque to the broker, who then made the payment to the seller. In this settlement process, the buyer and the seller might not even know whom they had traded with, either

being know only to the broker. This the brokers could manage primarily because by now they had become market makers and had started trading on their account. To keep up a semblance of legality, they pretended to be undertaking the transactions on behalf of a bank. Another instrument used in a big way was the bank receipt (BR). In a ready forward deal, securities were not moved back and forth in actuality. Instead, the borrower, i.e. the seller of securities, gave the buyer of the securities a BR. As the authors write, a BR confirms the sale of securities. It acts as a receipt for the money received by the selling bank. Hence the name - bank receipt. It promises to deliver the securities to the buyer. It also states that in the mean time, the seller holds the securities in trust of the buyer. Having figured this out, Metha needed banks, which could issue fake BRs, or BRs not backed by any government securities. Two small and little known banks the Bank of Karad (BOK) and the Metorpolitan Co-operative Bank (MCB) - came in handy for this purpose. These banks were willing to issue BRs as and when required, for a fee, the authors point out. Once these fake BRs were issued, they were passed on to other banks and the banks in turn gave money to Mehta, obviously assuming that they were lending against government securities when this was not really the case. This money was used to drive up the prices of stocks in the stock market. When time came to return the money, the shares were sold for a profit and the BR was retired. The money due to the bank was returned. The game went on as long as the stock prices kept going up, and no one had a clue about Mehtas modus operandi. Once the scam was exposed, though, a lot of banks were left holding BRs which did not have any value - the banking system had been swindled of a whopping Rs 4,000 crore. Mehta made a brief comeback as a stock market guru, giving tips on his own website as well as a weekly newspaper column. This time around, he was in cahoots with owners of a few companies and recommended only those shares. This game, too, did not last long. Interestingly, however, by the time he died, Mehta had been convicted in only one of the many cases filed against him