Central Listing Authority constituted

Justice Venketachelliah and the members would hold the office for a three-year term. The market regulator said the CLA has been set up to bring about the uniformity in the due diligence process in scrutinising listing applications across the stock exchanges.

Henceforth, no listing on stock exchanges would be allowed unless it is accompanied by a recommendation letter from CLA, which has been established under Regulation 3 of the Sebi Central Listing Regulation, 2003.

8220;CLA will act as a single nodal agency responsible for ensuring quality of listings, continued compliance, timely dissemination of information and action against erring companies. After getting a CLA approval, the company can apply to any other exchange for listing,8221; said a Sebi source.

The authority will be different from the National Listing Authority being tried out in the UK, which is under the control of the regulatory body. CLA will be an autonomous body not falling under the Sebi purview but represented by bourses.

8220;With different listing regulations existing across the 23 bourses, there is a need to tighten listing norms so as to ensure seriousness from players,8221; Sebi officials said.

Currently, all issuers have to file their offer documents with Sebi who vets it for disclosures. However, there are sceptics who doubt the efficacy of CLA. 8220;The proposal has come too late in the day, as most of the regional stock exchanges are on the last leg of their journey to death due to low trading volumes. Many companies are on their own seeking a delisting from the regional stock exchanges because of lack of liquidity on these bourses. A host of dud companies have already managed to get listed on the stock exchanges,8221; said a merchant banker.

That apart, the electronic trading platforms of BSE and NSE have ensured a nationwide presence for these two exchanges, eliminaing the need to list on regional stock exchanges. Eventually, with only three to four exchanges remaining, the necessity of CLA is a moot question. Sebi has been advocating corporatisation and demutualisation of stock exchanges as a tonic for survival.

8220;More than a CLA, there is a need for an investor body to handle investor complaints at all exchange levels, which will solve investor problems such as failure in publishing results, declaration of bonus and dividends. The investor agency will become responsible for taking up these matters with Sebi,8221; he said.

Meanwhile, exchanges themselves are implementing stringent listing norms. BSE, for instance, has issued new listing norms in August for companies listed on other exchanges and seeking listing on BSE. The company should have a minimum net worth of Rs 20 crore, profit-making track record for 3 years, minimum market cap at two times its paid-up cap and dividend track record for three consecutive years.

Besides, there should be a two-year track record of being listed on a regional exchange. At least 25 per cent of the issued capital should be with non-promoter and no single shareholder should hold more than 0.5 per cent of the capital.