The Federation of Indian Stock Exchanges (Fise), which represents the interests of 20 regional stock exchanges, has asked the government to give bourses adequate time to find equity partners for diluting their stake in the run-up to demutualisation.
In a presentation today, the newly-appointed Fise president Vijay Bhushan said the government or the Securities and Exchange Board of India should work out a detailed road map for demutualisation. "Till such time, a status quo should be maintained," he said.
Sebi chairman D R Mehta had on January 10 sent a written directive to the presidents of all recognised stock exchanges asking them to suitably change their bylaws and rules and remove brokers from top management positions like president, vice president and treasurer.
According to Bhushan, there are several bourses which have little or negligible turnover. "In such cases, removal of office bearers does not serve any purpose," he said. Some other exchanges like the Bangalore Stock Exchange had proposed to Sebi to allow a reverse merger with its subsidiary. The proposal is still pending with the regulator.
Bhushan said exchanges which have formed subsidiaries would want to diversify into selling other financial products like mutual funds and insurance policies, besides being a depository participant. "Such exchanges can be allowed to become a financial services institution," he said.
Bhushan, who is also the president of Delhi Stock Exchange, said it did not make sense for Sebi to ban member-brokers from being office bearers in bourses which have already submitted a demutualisation plan to the regulator.
For instance, DSE has the board approval for 100 per cent acquisition by Bombay Stock Exchange.
"So, banning brokers from the management did not quite mean anything. In any case, once we are merged with BSE, we will be only trading members there and our positions would have no relevance," the Fise president said.
