Bourses are contemplating resuming share-netting facility after 17 years as they believe this trading system will help reverse the slumping turnover. Netting is used in share trading, where an investor can change his position on a single day. For example, if an investor sells 100 shares of a security in the morning session and can buy the same scrip in a subsequent session of the same day. This accelerates the speed of fund while boosting commission earning by the stock brokers.
The netting system was operational until 2002 after its launch in 1996. The bourses failed to continue the system as many stock brokers, stock dealers had fund crisis and other complexities during the period.
The DSE management chief suggests that the ‘short-selling’ mechanism should also be introduced in this connection. The DSE had issued a regulation on short-selling sometime in 2006 but it did not implement due to lack of adequate incentives for the parties concerned. The bourse is now working on a new short-selling regulation.
Source: The Financial Express; Monday, 25 March 2019