PR-118/2005

 

SEBI approves Corporatisation and Demutualisation Schemes of

8 Stock Exchanges

 

The Securities and Exchange Board of India (SEBI), after following the due process and on being satisfied that it would be in the interest of the trade and also in the public interest, has today approved and notified the Corporatisation and Demutualisation Schemes of eight more Stock Exchanges. It has also notified that the OTC Exchange of India is already a corporatised and demutualised Stock Exchange.

 

The details of the Corporatisation and Demutualisation Schemes of these Stock Exchanges are as follows:

Sl. No.

Stock Exchange

Order No.

S.O. No.

  1.  

OTC Exchange of India

49395

1313 (E)

  1.  

Vadodara Stock Exchange Limited

49397

1314 (E)

  1.  

Jaipur Stock Exchange Limited

49399

1315 (E)

  1.  

Magadh Stock Exchange Association

49401

1316 (E)

  1.  

The Ludhiana Stock Exchange Association Limited

49403

1317 (E)

  1.  

Saurashtra Kutch Stock Exchange Limited

49405

1318 (E)

  1.  

Bhubaneswar Stock Exchange

49407

1319 (E)

  1.  

Inter-connected Stock Exchange of India Limited

49408

1320 (E)

  1.  

The Stock Exchange - Ahmedabad

49400

1321 (E)

 

The broad features of these schemes are:

 

a.      The Stock Exchanges that are association of persons shall be converted into a for-profit company limited by shares. The Exchanges that are companies limited by guarantee shall be re-registered as companies limited by shares.

b.      The ownership and management rights and trading rights associated with membership cards shall be segregated. It shall not be necessary for a shareholder to be a trading member and vice versa.

c.      The membership cardholders shall become initial shareholders of the Exchange which shall ensure that at least 51% of its equity shares are held by public other than shareholders having trading rights within 12 months.

d.      No shareholder, who is a trading member, shall have voting rights (taken together with voting rights held by him and by persons acting in concert with him) exceeding specified percentage of the voting rights in the Exchange.

e.      The membership card holders shall be trading members of the Exchange initially.

f.        There will be only one class of trading members with similar rights and privileges and uniform standards shall be followed in terms of capital adequacy, deposits, fees, etc while admitting any person as a trading member or accepting his surrender.

g.      The Governing Board of the Exchanges shall be so constituted that the representatives of the trading members do not exceed one-fourth of its total strength.

h.      The trading members shall clear and settle trades till the clearing and settlement functions are transferred to a recognized clearing corporation which shall happen within two years.

i.        The Exchanges shall ensure that the assets and reserves are utilised only for the operations of stock exchange.

 

SEBI had earlier notified the Corporatisation and Demutualisation Schemes of  11 Stock Exchanges, namely The Stock Exchange, Mumbai, The Calcutta Stock Exchange Association Limited, The Delhi Stock Exchange Association Limited, Madras Stock Exchange Limited, Pune Stock Exchange Limited, Cochin Stock Exchange Limited, Madhya Pradesh Stock Exchange, The Gauhati Stock Exchange Limited, The Uttar Pradesh Stock Exchange Limited, The Hyderabad Stock Exchange Limited, and Bangalore Stock Exchange Limited. It had also notified that the National Stock Exchange of India Limited was already a corporatised and demutualised Stock Exchange. With today’s notification, SEBI has approved and notified corporatisation and demutualisation schemes of  19 Stock Exchanges and notified that two Stock Exchanges are already corporatised and demutualised.

 

The full texts of the Orders and the Schemes are available on the website: www.sebi.gov.in

 

Mumbai

September 15, 2005