Of the 10 Regional Stock Exchanges (RSEs) that were to complete the process of demutualisation within the one-year deadline set by the Securities and Exchange Board of India (Sebi) in August 2005, the Hyderabad Stock Exchange (HySE) has failed to meet the deadline that ended on Wednesday. On the other hand, other nine RSEs have intimated to the capital market regulator that they have successfully sold the majority of their shareholding to public shareholders other than member-brokers of the exchange as per the demutualisation scheme submitted by them to Sebi.
A Sebi official said, ?The deadline for nine RSEs namely Madras, Pune, UPSE, Cochin, Delhi, Bangalore, MPSE, Gauhati and Calcutta Stock Exchange have submitted the details of their prospective shareholders who are other than the existing shareholders (member-brokers) of the exchange. Only Hyderabad Stock Exchange (HSE) has failed to submit its list of investors to the Sebi.?
HSE officials were not available for comment, as sources said they were busy in an emergency HSE board meeting convened to discuss the future course of action in the wake of exchanges’ failure to meet the Sebi deadline. As per Sebi sources, the exchange which fails to meet the stipulated deadline faces the risk of de-recognition as per the provisions of Securities Contract Regulation Act (SCRA).
According to the information, the Madras Stock Exchange (MSE) has attracted nearly 36 investors, including the state-owned investment organisation TIDCO and corporates such as Reliance Energy (through its associates), Orchid Pharmaceuticals, SSI, Polaris, Big Metal Bearing and other small and individual investors. Of these, SSI and Polaris hold 5% (a maximum holding as per Sebi’s demutualisation guidelines). The total shareholding of new investors in MSE other than stock brokers is estimated at 57.3% .
The Cochin Stock Exchange (CoSE) has sold most of its stake to individual investors. RK Pillai, executive director, CoSE said, ?We have fulfilled the mandatory requirement of handing over 51% of the share to the public”. The new shareholders include software company Asian CERC, which holds 5% of the shares and Kerala-based company Aspinwall, which holds less than 5%. The rest is held by individuals and does not include big names or high net worth individuals , he said.
The Pune Stock Exchange allotted 10 lakh shares to 44 new shareholders as part of its demutualisation process.
