Calcutta Stock Exchange (CSE) is trying to prevent its closure by bringing all regional stock exchanges (RSEs) under its fold even as Sebi is mounting pressure for an exit. CSE has approached the finance ministry seeking permission to tie up with any clearing corporation and re-start online trading, though Sebi has mandated that CSE has to either incorporate a clearing corporation with a minimum net worth of R300 crore or tie up with a clearing corporation with net worth of same amount.

B Madhav Reddy, CSE’s MD and CEO told FE there was no way that CSE could incorporate or tie up with a clearing corporation having a net worth of R300 crore. Sebi on May 2012 came out with an exit policy for RSEs mentioning that if an RSE didn’t have a minimum annual turnover of R1,000 crore on its own platform on continuous basis and a minimum net worth of R100 crore it would have to close down operations. The stocks of the exclusively RSE listed companies would either have to get listed with national level stock exchanges or would automatically go to the dissemination board.

While all the RSEs couldn’t meet this stipulation, CSE was the only operational RSE to have had a turnover of R9,200 crore and a net worth of above R100 crore. But it was caught in the Stock Exchange and Clearing Corporation’s (SECC’s) regulation of either incorporating or tying up with clearing corporation with net worth of R300 crore.

“We have written a letter to finance minister Arun Jaitely to relax the SECC norms. CSE becoming operational will prevent exclusively RSE listed companies to go to the dissemination board and help share holders get a fair value of their investment”, Reddy said.
There are fears that 4,000 companies worth over R2 lakh crore, exclusively listed with RSEs may escape their legal obligation of giving a fair price to the share holder taking advantage of the dissemination board.

The dissemination board run by NSE, BSE and MCX does not guarantee a fair price or a fair exit, according to V Nagappan, a stock market expert. He said with the RSEs asked to close down, the options before the exclusively RSE listed companies were to either get listed with the national level stock exchanges or get delisted as per the Sebi’s delisting regulation of 2009. If the companies failed to do both, they would automatically be moved to the dissemination board.