 "Calcutta Stock Exchange")
In an effort to stay afloat, the Calcutta Stock Exchange (CSE) will write to the Securities Exchange Board of India (Sebi) to exempt it from the new rules set for regional stock exchanges (RSEs), saying that it does not fall in the category.
The exchange is also seeking a tie-up with MCX-SX Clearing Corporation, as the May 30 deadline to meet the new regulatory norms to operate as a regional stock exchange knock on the door.
"Calcutta Stock Exchange is not closing down. There is a letter from Sebi, which only talks about the conditions to be met by regional stock exchanges. We are planning to tie up with MCX-SX Clearing Corporation to meet the Sebi norms for clearing corporations," B Madhav Reddy, managing director and CEO of CSE, told Business Standard.
According to sources, while CSE met all norms to function as a stock exchange, it failed to meet the criteria set by the regulator to tie up with a recognised clearing corporation. CSE was earlier close to formalising a deal with ICCL, clearing corporation of the Bombay Stock Exchange (BSE), to execute trades on C-Star. However, Sebi raised objections to the deal, according to the sources.
"CSE was executing the deal with ICCL in the same way as United Stock Exchange did with ICCL two years ago. However, the deal was stalled by Sebi," the sources said.
In its letter to Sebi, CSE will point out that it should not be treated as a regional stock exchange as it was recognised as a permanent exchange earlier, but was relegated to the RSE category due to low volume, the sources said.
In 2012, Sebi brought out new norms for RSEs, under which they need to own a trading platform, with annual trading of not less than than Rs 1,000 crore. The net worth of the exchange should not be less than Rs 100 crore.
Among all RSEs, CSE was the only exchange to meet the criteria set by Sebi till April 2013. Thus, while nearly 15 of the 20 regional stock exchanges decided to shut operations, the rest had been planning tie-ups or mergers with CSE.
Meanwhile, CSE has struck a deal to take over the Madhya Pradesh Stock Exchange, which involves shifting of 122 brokers, 289 companies and employees of the exchange to CSE. The exchange has also signed MoUs with Over The Counter Exchange of India, Ludhiana, and the Bangalore Stock Exchange to shift companies listed on them to CSE.
CSE, in which BSE has five per cent stake, is the only regional stock exchange to have its own trading platform, the C-Star, and a net worth of Rs 100 crore as it owns a number of properties in Kolkata. At present, nearly 2,500 companies are listed on CSE, and the exchange had yearly trading of nearly Rs 9,500 crore before April 2013, said Reddy.
