The Ludhiana Stock Exchange has become the second stock exchange in the country to get demutualization. The SEBI has asked the regional stock exchanges to demobilize before September 15 next and the LSE has become second stock exchange in the country to complete this process and send the report to BSE and SEBI.
BB Tandon, chairman of Ludhiana Stock Exchange told FE that the LSE had sent to Securities and Exchange Board of India (SEBI) a proposal in this regard sometime back under section 4B of the Securities Contracts (Regulation) Act 1956 for Demutualization Scheme 2005. However, SEBI advised LSE to submit a revised scheme, after taking into account the provisions of the BSE (Corporatisation and Demutualization) Scheme. The Scheme provided for the seggregation of ownership and management from the trading rights of the members, restriction on voting rights of shareholders also the trading members, composition of the governing board, utilization of assets and reserves.
The SEBI had approved the scheme with minor modifications and the LSE received a communication in this regard from M Damodaran, chairman, and SEBI. It was after this that LSE started the process to complete the work of mutilisation.