Small bourses closure to shut out 3,300 firms

MARKET REGULATOR PLANS SYSTEMIC OVERHAUL

More than 3,300 companies will be out of the public domain once the market regulator implements the guidelines for regional stock exchanges (RSE). A committee headed by the Sebi wholetime member G Anantharaman has submitted a set of recommendations on the future of RSE on May 8.

Sebi chairman M Damodaran said that more than 80 per cent of the companies listed only on regional stock exchanges were not complying with the listing agreement of exchanges and corporate governance.

"These stocks will be delisted from the exchanges. In fact a lot of companies will be automatically delisted if the stock exchanges are dismantled," he said. Damodaran was in Kolkata today to participate at a seminar on capital markets, organised by Bengal Chamber of Commerce & Industry.

Sebi executive director Pratip Kar confirmed that more than 3,800 companies were listed only on the RSEs. There are 21 RSE's in the country.

"Only 500 companies among them are regularly complying with the listing agreement," he said. Sebi chairman said delisting of these companies would not hurt investors' interest as public holding was negligible. "Most companies are non-existent and not being traded either. These are a regulatory burden," he said.

Commenting on the fate of RSE's, Damodaran said Sebi would wait for a month for public comments on the recommendation and would then discuss the issue with the authorities concerned after that.

"We are likely to form a committee for the implementation of the recommendations after that and will have a timeframe for the whole process," he said. The Sebi report has classified RSE's into three categories.