Considered as one of the first stock exchanges to be inaugurated in 1937, the Madras Stock Exchange which celebrated its 75th year anniversary two years back, is expected to close its doors.
According to sources, the stock exchange was gearing to adhere to the norms laid down by Sebi which directed regional stock exchanges to set up trading platform and clearing corporation.
Though the trading platform was set up by the former Board of Directors, setting up of a clearing corporation was not possible due to norm of attaining Rs 100 crore net worth, they said.
As per the SEBI norms, stock exchange must be of Rs 100 crore net worth to run 'Clearing Corporation' which should be scaled up to Rs 300 crore in two years time.
"This direction was given to MSE by Sebi. Online trading platform was set up. To set up Clearing Corporation you must have a networth of Rs 100 crore which should be scaled up to Rs 300 crore in two years timeframe. The deadline was May 31, 2014. Since it is only a month away, it is not easy to attain networth of Rs 100 crore", an official who did not want to be named told PTI.
"Due to this issue, the possibility of getting unlisted from SEBI is high. Mostly, the small and medium enterprises will be affected," he said.
Besides, he said the free weekly programme conducted to train young graduates on stock broking by MSE would also be "stopped". "Even last week, the free classes were held. But may be it will be stopped in future", he said.
According to the annual report of MSE, the profit after tax for the year 2012-13 was just Rs 4.33 lakh as against Rs 35.21 lakh registered during the same period of previous year.
Gross Income of MSE for the period 2012-13 was Rs 3.58 crore as against Rs 3.48 crore, it said.
The exchange had to incur certain expenditure towards platinum jubilee celebrations and incur excess usage charges on electricit consumption which was imposed by Electricity board resulting in considerable drop in profits before tax.
"The exchange also had to make a provision for payment of service tax leading to a dip in the Profit After tax.", it said.
