Mumbai: The Securities and Exchanges Board of India (SEBI) has de-recognised the Hyderabad stock exchange as the bourse failed to complete the process of selling 51-per cent of the brokers'' stake to other entities as per schedule.

"The recognition granted to HSE stands withdrawn with effect from 29 August, 2007," SEBI said in a release.

The HSE was supposed to complete its demutualisation process by 28 August as per SEBI rules.

According to the Securities Contracts (Regulation) Act, 1956, every recognised stock exchange has to sell 51 per cent of its stake to non-brokers, a move called demutualisation, within 24 months after such a scheme is approved by SEBI.

The regulator had notified the Hyderabad Stock Exchange Ltd (corporatisation and demutualisation) scheme, 2005 on 29 August, 2005, and so the bourse was mandated to complete the process by August 28 this year.