Unable to meet SEBI norms on net worth and turnover
Even as Kochi is riding high on a rising metro image, one of its prestigious possessions — the Cochin Stock Exchange — is walking into the twilight. Process for the exit phase of the stock exchange is in progress and Kochi will be deprived of its own stock exchange in the New Year.
The exit route is being pursued under the instructions of the Securities and Exchange Board of India, which has given an option to various regional stock exchanges to grow big or give up the identity as a stock exchange.
Observing the norm on a minimum net worth of Rs.100 crore and turnover of Rs.1000 crore was considered a difficult task by the governing body of the stock exchange and opted to exit.
Now, the stage is being set for a change in the nomenclature of the stock exchange in response to a circular issued by SEBI last year to regional stock exchanges. “CoSE has opted for voluntary exit under special dispensation offered to Regional Stock Exchanges by SEBI. This is different from normally understood derecognition since exit is voluntary and attached with conditions. Our exit process is expected to be completed within 3 months,” said Officiating Executive Director of the exchange P. Janaki Devi.
She said the investors in Kerala would not be affected since the stock exchange had been providing national platforms of NSE and BSE in all segments through its active, 14-year-old subsidiary namely, the Cochin Stock Brokers Limited. “There are no stocks which are exclusively listed in CoSE. Hence issuing companies are not affected at all.” After exit, the new entity in its new name and constitution, would be conducting extensive education programmes with the objective of turning our investors into informed investors, she said.
The exit scheme involves payment of about Rs.1crore - 2 crore to SEBI as exit fee. “There has been some confusion about raising the amount,” a former Director of the exchange told The Hindu. CoSE has about 500 members. Several among them have died while some of their ‘cards’ were transferred or sold. A waiver on some accounts has been sought and the SEBI decision is yet to come.
Brokers and investors have little role in the management of the exchange under the new regime set by SEBI. Public interest directors and shareholder directors have greater role. He said such provisions had become unattractive to them.
More than 100 brokers actively participate in trading on the NSE and the BSE platforms through Cochin Stock Brokers Limited, the present subsidiary of CoSE. The subsidiary would be carrying out business in tune with the rules and regulations set by SEBI even after the exit of the exchange, he said.