The Inter-Connected Stock Exchange (ISE), comprising eight regional stock exchanges (RSE), on Thursday decided to seek a hearing with the Securities and Exchange Board of India (Sebi) to present its concerns on the key recommendations of the Bimal Jalan committee.
ISE, formed in 1998 by regional stock exchanges, had planned to launch live trading in equity currently traded on NSE, BSE and RSEs under the permitted to trade category from February 2011 subject to regulatory approval. However, the recommendations of Jalan committee have created uncertainty over the future of RSEs, many of whom were looking to rope in strategic partners in the coming days for their expansion plans.
The Jalan committee, which was set up to study and review the ownership structure of the market infrastructure institutions (MII), had suggested capping profits of stock exchanges besides recommending against their listing. The committee suggestions have come as a blow to RSEs which had roped in additional investors as part of the demutualisation process on the promise of listing their shares. ?There was no mention of cap on profitability and non-listing of shares when these stock exchanges were asked to broad base their share holders as part of the demutualisation process three years back. Accepting these recommendations will be a retrograde step,? ISE chairman Rajendran Nair said. ?We will loose our credibility among our own participating members,? he added.
