My note on Sunita Chetri ji's comments on my post regarding delay in CDS implementation.
Sunita ji,
Good question. Let's see who benefits by delaying CDS implementation?
1. The big individual players, most of the time, buy without paying, get the documents in 3-4 days, put it in BT. Sell the shares in another 3-4 days. Get money in another 3-4 days and pay for the shares they had purchased. Hence, the BIG players who buy and sell without making payment, they will get benefit surprisingly. The brokers wait seeing the commission they get in the larger transactions.
2. If you or I buy and make payment the next day, the party who sold his/her share will get the payment after 10 days so in practice. Some lucky ones get in seven days but that is exception. The brokers could play with that transiting money for about a week, enough time to buy and sell for them. In this way, they also earn using our money in transit.
3. Many times you could see the brokers are out for transaction for certain days.. This happens primarily when something their tailor-made process get road blocks, though in some case and some times there could be some genuine causes.
4. CDS will wipe out this interval and will transfer money account to account, and then the play that uses money-in-transit will end.
5. The average daily transaction during the last couple of months is above 50 corers. By being highly conservative, at least 20% of that money is that of small investors. It means the daily average is 10 corers. If the brokers could hold for 7 days, it is 50 corers per week (minus Fridays Saturdays) and the cycle continues. This is not a small amount.
6. Hence, the beneficiary BIG players including big traders and the playing/colluding brokers (not all brokers) are against the CDS.
7. Besides, there could be several other parts of their modus operandi, for which other friends may be better informed.
Sunita ji,
Good question. Let's see who benefits by delaying CDS implementation?
1. The big individual players, most of the time, buy without paying, get the documents in 3-4 days, put it in BT. Sell the shares in another 3-4 days. Get money in another 3-4 days and pay for the shares they had purchased. Hence, the BIG players who buy and sell without making payment, they will get benefit surprisingly. The brokers wait seeing the commission they get in the larger transactions.
2. If you or I buy and make payment the next day, the party who sold his/her share will get the payment after 10 days so in practice. Some lucky ones get in seven days but that is exception. The brokers could play with that transiting money for about a week, enough time to buy and sell for them. In this way, they also earn using our money in transit.
3. Many times you could see the brokers are out for transaction for certain days.. This happens primarily when something their tailor-made process get road blocks, though in some case and some times there could be some genuine causes.
4. CDS will wipe out this interval and will transfer money account to account, and then the play that uses money-in-transit will end.
5. The average daily transaction during the last couple of months is above 50 corers. By being highly conservative, at least 20% of that money is that of small investors. It means the daily average is 10 corers. If the brokers could hold for 7 days, it is 50 corers per week (minus Fridays Saturdays) and the cycle continues. This is not a small amount.
6. Hence, the beneficiary BIG players including big traders and the playing/colluding brokers (not all brokers) are against the CDS.
7. Besides, there could be several other parts of their modus operandi, for which other friends may be better informed.
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