The Delhi Stock Exchange (DSE), which was to start trading on its platform from October, has postponed its plan.
On October 7, the Securities and Exchange Board of India (Sebi) issued a circular telling regional stock exchanges to seek its approval before starting trading on their respective platforms if they have not been functioning for over six months.
“We will tentatively launch by November after taking Sebi’s approval. Apart from the fact that Sebi’s approval is needed, we have been upgrading our trading platform and risk management systems,” said HS Sidhu, executive director and CEO of DSE.
Sidhu said DSE would apply to Sebi within a week. After this, the regulator would inspect the exchange’s platform and risk management systems.
Stock exchanges are recognised under Section 4 of the Securities Contracts (Regulation) Act, 1956. At present, there are 20 recognised stock exchanges in India. DSE is the latest independent exchange that plans to start trading on its floor after several years.
Sebi asked defunct regional exchanges to take its approval again to ensure that they complied with all its rules that came into force while these exchanges were closed.
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“With corporatisation and demutualisation of stock exchanges, some stock exchanges have generated renewed trading interest and are in the process of resuming trading. While these stock exchanges have had no trading for quite some time, the regulatory changes introduced by Sebi in the interim may not have been complied with,” said Sebi in its circular.
Sebi said these exchanges would be required to have effective trading as well as clearing and settlement systems, a monitoring mechanism, and a risk management system.