Anand Rathi, the 52-year old new President of the Bombay Stock Exchange (BSE), belongs to that generation of brokers who acknowledge the fall in BSE's image and the need to arrest that corrosion. A chartered accountant by profession, Rathi was the senior president of Birla-owned Indian Rayon before entering the stock exchange as a broker in the early Nineties. He has taken over BSE at a time when it is taking flak for gross mismanagement and violation of trading norms by its own governing board members. Rathi, who played a key role in setting up the depository and starting derivatives trading, spoke to R L PAI on a host of issues plaguing the controversial exchange which is termed as a `club' dominated by a coterie of brokers. Excerpts: What are your views on the recent controversy over the price rigging and payment crises on the BSE and the SEBI directive asking the former BSE president J C Parekh to step down? Finance Minister Yashwant Sinha had said that this controversy is`unfortunate'.
Frankly, I do not want to comment on a matter which is sub-judice. Regarding Sinha's comment, I am not aware of it.
Don't you think the image of the BSE has taken a beating for all the wrong things that happened in the last two years -- price rigging, opening trading terminals after trading hours, payment crisis, not informing the board about various decisions...?
I admit that the going was not good in the last two years. We need to improve the image of the exchange and make it number one all over again. For this, we need to first improve the image of the broking community and their relationship with the regulator.
The BSE doesn't seem to be professionally managed as of now. Do you think more professionals should be brought in to clean up the exchange?
There are more professionals in the governing board as of today... at present, out of eight members, five are CAs. It is for the first time in the history of the BSE that a majority of the elected members areprofessionals. We need to make the BSE a self-regulatory organisation, which is the practice the world over. I am confident of achieving this target with my team of board members. The new board composition itself indicates that we can now assure a professional management of the exchange.
There is a view that SEBI should encourage non-active brokers to head the exchange to avoid manipulation and rigging. Any comments?
I remain fully committed to the bourse. The current team is best suited to push the exchange forward. The objectives are now clear -- we need to make the BSE the best exchange in the country.
How do you position the BSE vis-a-vis the NSE?
I believe in healthy competition which creates a better benchmark. We will try to create this kind of a benchmark.
What is your first priority as the new president?
My first priority is to improve the image of the BSE, especially with SEBI as well as with the Government. For the last two years, the image of the BSEhas been poor. It has to improve so that our exchange becomes investor-friendly. There is an imperative need for stock exchanges to move towards self-regulation as is the practice in the West. The image of the entire broking community needs to be improved vis-a-vis the investors and the government. Besides, we want to introduce derivative trading and set up a clearing corporation as soon as possible.
What are the new schemes that you are going to introduce?I have just taken over as president... give me two weeks time, so that we in the board can work out something that can make BSE the number one stock exchange in the country. The foremost objectives are to expand our BOLT operations overseas, pursue derivative trading as soon as the regulation is passed, set up a clearance corporation to make BSE an international exchange in the new millennium and create all the best practices within the regulatory framework. The on-line system for derivatives trading is almost ready with the hardware requiredfor the trading in place and the software undergoing the necessary test.
What steps will you take to make BSE investor friendly?
We will take all measures possible to make it investor-friendly. The BSE is the oldest stock exchange in the country. The biggest advantage is that ours is the only stock exchange in the country which has the maximum number of listed companies. With the onset of derivative trading, we want to make our stock exchange market-friendly.
What is your outlook for the stock markets and the economy?
At present, the market is in a trading zone and till the entire economy gets moving, the market will continue to move in a narrow band. Unless the economic fundamentals of the economy improves, I do not foresee any boom in the coming months. As far as the economy is concerned, I think there are enough signs of economic revival fueled by strong agricultural output.
Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.
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