BSE to take up corporatisation issues with Sebi

The Bombay Stock Exchange (BSE) brokers are planning to move the Securities and Exchange Board of India (Sebi) for dilution of norms in the demutualisation scheme approved recently.

Some members of the BSE Brokers' Forum said they were even planning to approach the Securities Appellate Tribunal (SAT), though they were hopeful of a solution in the meeting with Sebi.

A broker said, "At this point, we are not planning to move SAT. We are looking forward to thrash out a few contentious issues and hope to find a way out."

The regulator is understood to have asked other exchanges to rework their corporatisation scheme on the model of the BSE plan. According to broking sources, the contentious issues relate to utilisation of assets and reserves, voting rights, trading members, board composition and uniform standard.

Under the uniform standard, brokers felt that old members should be given preferential rights as they had built the organisation, whereas Sebi had only ascribed shareholding rights for them.

On the issue of board composition, while the new norms gave Sebi the right to appoint as many members it wants, brokers felt the composition should be left to be governed by the article of association.

Brokers said they should have the freedom to use reserves and surplus, but the regulator felt that the reserves were built with government support and tax exemptions such as capitals gains. Sebi felt that exchanges should use the funds to bring their infrastructure on par with global exchanges.