Chances of survival of country’s largest regional bourse Calcutta Stock Exchange remains bleak, with market regulator Sebi saying the business model of such exchanges is obsolete and “bound to fail”.
“Regional stock exchange as a business model (remains) obsolete model and bound to fail,” Securities and Exchange Board of India (Sebi) Chairman U K Sinha said today when asked about the fate of regional exchanges (REs), including CSE. CSE’s own trading platform has been shut since 2012 following Sebi’s directives. Sinha added REs can be operational now if they fulfil the criteria instead of asking for special dispensation and forbearance, which Sebi cannot provide.
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In contrast, CSE sources contend that Sebi is not replying to letters seeking their consent for filling independent director posts vacant since August 2016.
CSE has also submitted a business plan prepared by National Institute of Securities Markets (NISM), the educational arm of Sebi, and expressed willingness to form a clearing corporation, but the regulator is yet to respond, they said.
Sinha said 13 regional stock exchanges have closed in the last three years under the exit policy of Sebi, including Bangalore, Hyderabad and Madras Stock Exchanges, but the regulator is not receiving enough cooperation from the shareholders of CSE.
The matter is now sub-judice, he added. Sinha also mentioned that in 2016 when the country raised Rs 26,000 crore through IPOs, there was not a single company from the Eastern region. PTI BSM SUS