Madras Stock Exchange to wind up trading operations
02 Jun 2014
The Chennai-based Madras Stock Exchange (MSE) is likely to wind up its trading platform operations following Sebi's's directives to non-operational bourses to wind up operations.
However, after its status as an exchange is withdrawn, MSE will offer financial services through its subsidiary MSE Financial Services.
The development follows similar moves by some other regional bourses to exit on directives by the Securities and Exchange Board of India (SEBI).
As per SEBI directives, regional stock exchanges should generate annual turnover of Rs1,000 crore and have a net worth of Rs 100 crore. If the exchanges failed to generate such turnover and net worth, they should consider "exiting" from trading options.
According to an official of Madras Stock Exchange, a decision on "voluntary exit" was taken at the extraordinary general meeting held recently as investors wanted voluntary surrender of recognition as an exchange.
"It is nothing but an option to exit (from trading). This decision was taken at the EGM," the official said.
He further said the "exit procedure" would take at least "six-eight months" and the stock exchanges would focus on offering financial services. "Our plan of action is to enter into financial services."
One of the oldest stock exchanges in the country, MSE was set up as the first bourse in South India in 1937. Noting that MSE was already offering depository services to BSE and NSE, the official said MSE was generating good amount of business through that service.
On the presence of a large number of medium and small companies listed at MSE, he said with the help of BSE and NSE, Madras Stock Exchange would come out with additional features enabling them to get listed in BSE and NSE with a reasonable charge. "We have asked SEBI to support us in this initiative. It is exclusively listed schemes," he said.
