'Technical error' bug bites BSE

MUMBAI: It is now BSE’s turn to be hit by a “technical error”. Even as there is a move afoot to probe the delay in transfer of securities that took place on December 19 & 20, the market on Wednesday was once again abuzz with talk of payout problems. According to market participants a technical glitch saw payout being delayed at the BSE’s end. Several brokers said the exchange had communicated that payout would be delayed by a few hours. However till about 6.30-7.00 pm on Wednesday, the payout process was yet to commence. Several brokers also bemoaned the fact that this could mean that back-office operations at the brokers end would continue till about 9.30-10 pm. Even as questions about the efficacy of the system at the exchange level was raised, a moot point to note is that such delay in payouts is contradictory to what the capital markets regulator Sebi has intimated to the bourses. As per Sebi circular of September 2005, payout of securities by the exchange/clearing house/clearing corporation to the depositories is to be done by 1.30 pm on T+2, while payout of securities was to be completed by the depositories by 2.00 pm on T+2. Payin was to be done by 11 am. BSE spokesperson said it was a technical glitch and was largely on account of a delay at the clearing house end i.e. BOI Shareholding (Clearing House of BSE). They added that the regulator has been informed of the same. Delay in a few inter-depository transactions between NSDL and CDSL on December 19 & 20 had prompted the stock exchanges to auction a few shares thereby incurring losses to brokers and investors. Following this NSDL had written to SEBI suggesting that a committee be set up to probe this. Given the large volume of trades in the equity markets, there is concern that repeated disruptions on account of either software glitches or overloading of the systems could have adverse impact on the functioning of the capital market as a whole.