Regional stock exchanges in the state Ahmedabad Stock Exchange,Vadodara Stock Exchange,and Saurashtra & Kutch Stock Exchange may soon merge with each other and other stock exchanges in the western region to form a larger entity. This is likely to also include Pune Stock Exchange and Madhya Pradesh Stock Exchange. A similar plan to form larger stock exchanges by merging smaller regional ones is proposed in the countrys three other zones North,South and East as part of an effort by the regional stock exchanges to fight off stringent regulatory changes announced recently by the securities market regulator,Securities and Exchange Board of India (SEBI). Recently,SEBI proposed new policy initiatives based on a high-level committee recommendation headed by former Reserve Bank of India Governor Bimal Jalan,according to which,a stock exchange in the country should have a minimum net worth of Rs 100 crore and existing stock exchanges will be given three years to comply with the norm. Against this,net worth of stock exchange in Ahmedabad currently stands at Rs 54 crore and that of Vadodara is in the range of Rs 20-50 crore. Ahmedabad Stock Exchange chairman Hemantsinh Jhala said the regional exchanges have proposed the merger strategy but any move in this direction will be made only if SEBI accepts the proposal. Merger will increase our collective net worth but terms and conditions of such a merger will have to be sorted out,which may not be easy given varying strength of different regional stock exchanges, he said. We may ponder over having common trading platforms in four different zones in the country so that we comply with the new norms put out by SEBI. SEBIs proposal will affect approximately five lakh employees associated with these (regional) exchanges, said Jagdish Thakkar,secretary of the Federation of Indian Stock Exchanges,a representative body of 17 regional stock exchanges in the country. He is also the director of Vadodara Stock Exchange. Among other proposals,SEBI has said that turnover of a stock exchange should be a minimum of Rs 1,000 crore per year for the first two years. It also bars trading member of a stock exchange from being on the board of directors of the exchange. As per the current setup,three members out of 12 on the board of directors of a regional stock exchange are trading members.
