By Rutam Vora
Regional stock exchanges (RSEs) in the country might get a few more weeks to prepare a schedule on meeting the minimum net worth criteria set by the Securities and Exchange Board of India (Sebi), say sources. There was a meeting between Sebi officials and members of the Federation of Indian Stock Exchanges (FISE) on Tuesday, regarding the criteria set last June. “In December, the RSEs were asked to submit within 90 days a road map for achieving the minimum net worth criteria. RSEs found it difficult and have suggested extending this period to a year. Sebi declined to give a year but has agreed on a few weeks more,” said Jagdish Thakkar, general secretary of FISE.
The 90-day period for filing the schedule ends on March 12. “A new date may be formally announced soon,” said Thakkar.
Present at the meeting with Sebi were representatives from the regional stock exchanges of Delhi, Kolkata, Chennai, Bangalore, Pune, Ahmedabad, Kanpur and Ludhiana, among others. None has given the schedule on achieving the minimum net worth of Rs 100 crore over the next three years. There was no representation from the Vadodara Stock Exchange (VSE) and Jaipur Stock Exchange.
“Sebi is positive for supporting the RSEs. But extending time limit might further delay the process of making RSEs compliant with the new rules,” said an official of one of the exchanges who was present at the meeting.
According to exchange officials, it took a lot of time to evolve a plan for meeting the Sebi norms. “Many exchanges have not even discussed the road map with their shareholders. It requires a month’s notice in advance to convene an EGM (Extraordinary General Meeting). Presently there is no time for an EGM, unless Sebi extends the time limit by a few weeks,” said a VSE official.
In its representation, FISE has also requested the regulator to evolve a model under which defunct exchanges could easily be merged or taken over by other and competent exchanges. “There should be provisions similar to the one in the Banking Regulation Act, whereby banks can take over sick banks. This will bring consolidation,” said Thakkar.