BANGALORE, Aug 15: Indian stock brokers may soon come under the ambit of a common code of ethics, if the Federation of Indian Stock Exchanges (FISE) has its way. FISE has set up a panel headed by the Bangalore Stock Exchange (BgSE) to work out the modalities of such a code.

The panel will submit its report to FISE at its next meeting in October at Delhi, said Pankaj J Shah, director, BgSE and committee member. According to Shah, the code will be made mandatory for BgSE members also. ``The necessity for such a code was felt because inspection of BgSE brokers' books revealed that many of them were not even aware of their positions,'' said Shah.

Once the code is in place all the documents of the broker vis-a-vis networth, clients etc will be thoroughly scrutinised. Discrepancies will be brought to the notice of the broker immediately and action will be initiated in cases where the need arises, he added.

The main area that will be covered by the code will be accounting practices, said the BgSE director. Currently brokers adopt various accounting practices which make it difficult for the bourse officials to check. Though the panel has not yet decided on the accounting practice it is currently in talks with various brokers for this, he said.

FISE has also set up a panel to work out the modalities for futures and option trading as and when it is likely to be introduced in the country. This issue is also likely to come up for discussion at the next meeting, he added.

The FISE which met at Kanpur recently has also decided to conduct its organisational elections in October. The current acting head Deepak Choudhary, president, Delhi Stock Exchange is likely to be re-elected as chairman. Choudhary took over from Paramjit Singh as DSE president in controversial circumstances as the latter had to step down following SEBI strictures. Elections will also be held for the posts of vice-chairman, secretary and treasurer from the other bourses. The meeting will also elect a new executive committee for FISE and finalise the revised bye-laws for the organisation.

The Inter-Connected Market System (ICMS) plan of FISE is also going on in full swing, said Shah. The final bids for the hardware and software have been received and a formal decision is expected soon, he said. Though the Securities and Exchange Board of India (SEBI) has given an in-principle approval, a formal consent has been sought from the regulator added Shah.

The ICMS connecting bourses across the country is expected to go online by February next year. Magadh has become the latest entrant to join the ICMS bandwagon taking the tally of bourses to 14. The DSE, which has all along been behaving in a big brotherly fashion, has also formally expressed its intention to join the ICMS once it gets the approval from shareholders at its AGM next month.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.