Ludhiana bourse mulls BSE tie-up

The Ludhiana Stock Exchange (LSE), which caters for investors in Punjab, Himachal Pradesh, the Union Territory of Chandigarh, and Jammu & Kashmir, is in talks with the Bombay Stock Exchange (BSE) for a tie-up.

Once it is finalised, all the 294 members of the exchange will become virtual members of the BSE and can trade directly in the shares of 5,000 companies, as currently they are trading through the subsidiary company LSE Securities limited.

LSE Executive Director H S Sidhu, who was in the city to address an "investor awareness" workshop, which is on empowering investors through education under the aegis of securities market awareness campaign, said, "Once the MoU is signed, all the 294 members of the exchange will be virtual members of BSE and we are hopeful this move will help the investors." Commenting on the fees, Sidhu said, "They (BSE) had offered us Rs 10 crore, which will be funded partly through the exchange fund and members."

Meanwhile, the LSE, through its subsidiary LSE Securities Ltd, does a business of Rs 200 crore a day. This includes the trading volumes of the capital market segment of the BSE and the National Stock Exchange (NSE) and the futures and options (derivatives) segment of the NSE.

Sidhu said the LSE was awaiting Sebi diversity guidelines on demutualisation. The demutualisation of the exchange will separate ownership from management and trading.

He said, "By demutualisation, Sebi aims to bring professionalism in the functioning of the stock exchanges. The idea is to shift majority ownership in the hands of investors whereas trading will remain the domain of brokers and professional experts will take care of managing the exchanges."

He added, "The separation of ownership from management will make brokers more accountable to the management, which would also provide a better professional environment to investors. Besides, demutualisation would give stock exchanges freedom to take decisions on diversification and revenue generation."

The completion of the process implies that brokers would off-load their shares to the extent of 51 per cent within one year. It is pertinent to mention here the Board of Directors of Ludhiana Stock Exchange has finalised the scheme for revised demutualisation of the stock exchange as per directions given by the SEBI to all the stock exchanges in the country.

Meanwhile, he informed that the stock exchange is going to organise 50 awareness workshops for investors in this financial year. The stock exchange, in association with Sebi, will conduct these awareness workshops in Punjab, Himachal Pradesh, J&K and adjoining areas of Rajasthan

"A Diploma programme in Capital Market", by the exchange is in the pipeline, Sidhu said. LSE and Panjab University's Centre for Industry-Institute Partnership offers a Certification Programme in Capital Market.