An investor, today, need not wait, with his fingers crossed, for a fortnight or more, for getting crossed cheques or crisp notes for the sale proceeds of his securities. The tradingcycle has been shortened to T+2. This shortening of the cycle has been done in a phasedmanner but in a rapid succession ± from T+5 to T+3 to T+2, all in a matter of two years.
Another material development, which proved to be of immense relief to the investors,was dematerialisation of the scrips. Now 99% of the scrips in the market aredematerialised. Almost 100% of the trades are in D-mat form. Inconvenience of physicalcustody and transfer, tedium of intimating change of address and problems of baddelivery, late delivery, non delivery and the risks of forgery and frauds have virtuallydisappeared ± or shall I say - have been dematerialised! The benefit is relished but not thecost. We should bear in mind the maxim ± no cost, no benefit. There is no free lunch inthis world. Still, there is no denying the fact that there could be a possibility for reductionin the cost; such possibilities are explored.
At the stock exchanges, robust risk management system has been put in place, Value-at-risk margining and exposure limits, on-line monitoring of margins and positions,Clearing Corporation and Settlement Guarantee Fund mechanism for trade settlement ± all these have made Indian capital market now arguably world class, in terms of transparency, efficiency and safety.
Antiquated and abused badla system or ALBM stands abolished. In its place, for hedgingand trading purposes, a number of derivatives ± in the form of futures and options, bothindex-based and stocks-specific have been introduced. The sophistication of these products have not scared away our brokers and investors. Instead, with their nativeintelligence, they are as comfortable in the F&O Quarter as a fish in the water. Thevibrancy of F&O segment has surpassed the cash segment in terms of daily turnover within a short period.
Corporate bonds and Government Securities used to be traded via telephone exchange. A beginning has been made for their trading on the stock exchange now. As is natural, theweaning takes time!
Our accounting standards are already principle-based; they have been aligned withinternational standards almost in all aspects, barring one or two. Our disclosurerequirements, both initial and continuing, are on par with global practices.