The Securities and Exchange Board of India (Sebi) chairman Gyanendra Nath Bajpai expressed doubts on the future of the 23-odd regional stock exchanges.
However, he has added in the same breath that the infrastructure of the exchanges, which were built over long period of time, should not allow to destroy.
Asked whether Sebi would support the exchanges to survive he said the market regulator would prefer market forces to determine their fate. " This is not a question of whether Sebi is supportive to the survival of the exchanges. This is something related to service. One who can perform up to the investors' expectation survives in a free market," he said.
Bajpai said the regional stock exchanges should use their infrastructure to churn out alternative source of revenue.
"Given the technological upgradation, each and every trading terminal operates like an exchange. In this circumstances, the survival of regional stock exchanges are put under pressure, " he said.
He said the Justice Kania Committee, which was working on computation and demutalisation of stock exchanges, was asked to include the possible new roles the stock exchanges would take up to survive. The report would be made public shortly.
The regional stocks exchanges are under pressure for sometime with the regional traders being channeled to the National Stock Exchange for the depth of the latter's market. The situation took a turn for worse after the imposition of turnover tax (ToT) on the brokers. As trades on NSE do not come under the purview of ToT, brokers now prefer to trade on the Mumbai-based bourse.
He said now the Sebi was in the process of implementing measures to achieve mid-term strategic aims in every spheres in which it operated namely investors, corporate, exchanges and intermediaries, and regulatory regime.
For this, Sebi would make a sustained attempt on nation-wide awareness on securities markets, enhancing of continuous disclosure standards and implementation of Malegam Committee recommendations on disclosure in offer documents.
Meanwhile Sebi would take "necessary steps" to introduce a basic curriculum on stock markets in the 10+ 2 levels. This is in line with Sebi's aim to educate investors. Disclosing this, Bajpai said the curriculum would help the students a first hand guidance on the stock market related issues and instruments well before they would emerge as investors. " We have decided to introduce the course in the plus 2 level. Now we will have to get the permission of the concerned authorities," he added.
