Features of Report, recognised measures prevent gambling in a Stock Exchange

A reader, Jaya Raj, critiques the Stock Exchange Enquiry Committee's Report for being "innocuous" and lenient toward market manipulation. The letter argues that by failing to rigidly enforce the Rule of Margins, the Committee has offered an "easy alternative" that will not effectively curb gambling. The writer scoffs at the suggestion of Government-appointed directors as an ineffective check on speculation. However, the report is praised for some progressive steps, specifically the recommendation to abolish Blank Transfers and the demand for deposits from new members, which are seen as necessary sanitary measures for the exchange .

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Development finance institutions have played a constructive role in establishing India's industrial base. However, these institutions seem to have moved away from their developmental role and are getting entangled deeper in management and control of private sector industries. Corporate circles have been pleading for a re-examination of the role and appointment of nominee directors to avoid day-to-day interference in company operations. Furthermore, some argue that financial institutions should keep their funds rolling by disposing of shares with a ready market. The concept of growth or mutual funds has yet to take root in the country, but such funds could prove successful in mobilising and canalising community savings for industrial development.

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The government has amended the Securities Contracts (Regulation) Rules, 1957, to allow a company to become a member of a stock exchange if it satisfies certain conditions. The conditions are that the company is formed in compliance with the provisions of section 322 of the Companies Act, that a majority of the directors are shareholders of the company and members of the stock exchange, and that the directors have "unlimited liability" in the company. Under the amended rules, notified in the Gazette of India Extraordinary, the stock exchanges would admit these members on the recommendations of several financial institutions, including the Industrial Finance Corporation and the Industrial Development Bank of India