The idea of setting up a common stock exchange of the three Gujarat-based regional stock exchanges (RSEs) including Ahmedabad Stock Exchange Limited (ASE), Vadodara Stock Exchange Limited (VSE) and Saurashtra and Kutch Stock Exchange (SKSE) has been dropped as members of VSE did not agree on merger.
"After discussing with the members and advisory committee, it was decided that we should check other options than the merger with ASE or SKSE," said Jagdish Thakkar, trading member director of VSE.
According to Thakkar, the idea of new exchange was not cleared at the meeting so that it became difficult to explain and convince the members for the merger.
The three exchanges had set up a committee to look after the matter related to merger and new common bourse. But after discussing with the members of VSE, this idea was dropped.
However, other stock exchanges have kept the option of merger open. "The option of merger is still open with other bourses. But as far as the idea of a common stock exchange in Gujarat is concerned, it has been dropped as most of the members did not agree to the concept," said Sunil Shah, director of SKSE Securities Limited.
SKSE is now exploring possibility of a merger with the newly launched MCX Stock Exchange. "We will meet MCX Stock Exchange officials regarding the merger proposal, most probably in the next week," said Shah.
Besides, SKSE, other stock exchanges are also understood to be considering a merger with MCX Stock Exchange.
It may be noted that Securities and Exchange Board of India (SEBI) had derecognized SKSE in July 2007, on the grounds of vacuum at the top management level, inadequate infrastructure, broker's interference in the day-to-day operations of the exchange and the overall lack of interest of members to revive trading on the regional bourse.
SKSE had challenged the SEBI decision in Securities Appellate Tribunal (SAT) but tribunal gave a decision against SKSE. Thereafter, SKSE officials went to Supreme Court, which ruled against SKSE in May 2012.
According to SEBI circular for regional equity bourses, it is necessary for RSEs to achieve Rs 100 crore net worth or an annual turnover of Rs 1,000 crore to continue as an operational exchange. After SEBI’s circular on regional exchanges ASE, VSE and SKSE had met in June this year and decided to set up common bourse in Gujarat.