Three regional stock exchanges having operations in Gujarat are considering to set up a common bourse in the state. Ahmedabad Stock Exchange (ASE), Saurashtra Kutch Stock Exchange (SKSE) and Vadodara Stock Exchange (VSE) will propose formation of new stock exchange to the members in their respective boards soon.
Officials of all the three exchanges met in Ahmedabad on Monday and discussed the possibility to set up a combined new stock exchange in Gujarat. "We are considering to set up a combined new bourse of ASE, VSE and SKSE in Gujarat. This idea is however in a primary stage and we will asses all the aspects related to it," said Sunil Shah, director, SKSE Securities Limited.
All the regional exchanges will call immediate board meetings and put the proposal to the board.
At the board meeting of VSE held on Tuesday, the board of directors gave an in-principal approval to go ahead with setting up a new exchange along with other regional stock exchanges. "We have decided to go with SKSE and ASEL. Moreover, we will form a five-member committee to look into the matter. This committee will also check all the aspects regarding the new exchange and inform the board time to time," said, Jagdish Thakkar, director, VSE.
After board approval, regional exchanges officials will meet again on July 10 to take the proposal forward. ASEL board meeting will held on June 28 and SKSE board is scheduled to take place on June 29. "In order to figure out legal and technical issues related to setting up the new stock exchange, we will hire legal advisors and consultants. And after that we will send the proposal to the Securities and Exchange Board of India (SEBI)," said Hemantsingh Jhala, chairman and shareholder director, Ahmedabad Stock Exchange Limited (ASEL). The three exchanges have decided to form a special committee to implement the idea. Two members of each from ASE, VSE and SKSE will have representation in the proposed committee. Stock market experts, however, are of the view that it would not be a viable option for the regional bourses to go for an all new exchange as distribution of shares, KYC (know your customer) norms and regulatory related issues are likely to pose a major challenge for them. It may be mentioned here that t he securities market regulator-SEBI-had issued a circular on 'Exit Policy for de-recognized or non-operational stock exchanges'. This made regional stock exchanges struggle to survive.
According to SEBI circular, it is necessary for regional stock exchanges to achieve Rs 100-crore networth or an annual turnover of Rs 1,000 crore annually. It is difficult to achieve such turnover in regional stock exchanges space. SEBI has already de-recognised SKSE in 2007, while ASE and VSE are also exercising to fulfill the SEBI conditions.
