Bourses feel shareholder heat over anti-listing proposal

Bourses feel shareholder heat over anti-listing proposal

New Delhi: Under pressure from shareholders -- mostly foreign institutions -- at least two stock exchanges including BSE, may approach the government and regulator Sebi against a proposal to disallow bourses from getting listed.

An expert committee set up by Sebi proposed late last month sweeping changes in the way stock exchanges are owned and earn profits. The proposals included not allowing the bourses to get listed, and capping their profits.

However, these proposals have not gone down well with shareholders who are estimated to have invested over Rs10,000 crore in the country’s various bourses over the past few years, market sources said.

Some of these shareholders, mostly from overseas, have already expressed their concern with the respective bourses over the regulatory proposals, which have been put out by Sebi for public comments till 31 December.

Facing shareholder opposition, top officials of the country’s oldest stock exchange BSE have met senior finance ministry officials and the bourse will soon write to Sebi expressing its opposition to the proposals, sources said.

MCX-SX, a new entrant to the stock exchange arena, which is currently allowed to trade in currency futures only and whose plea for trading in equity and other segments has been rejected by Sebi, may also oppose these proposals.

Some shareholders of NSE are also said to have expressed their concern over the non-listing proposals, but the exchange is unlikely to oppose the proposed move, sources said.

While BSE has previously made public its intentions to get listed, MCX-SX is also said to have been always in favour of the bourses getting listed themselves. However, the country’s largest stock exchange NSE has never expressed its intention to get listed and is said to be of the view that it would consider listing only if it is made mandatory.

A number of investors, domestic and overseas, have joined the three bourses as shareholders in the past few years collectively putting in an estimated Rs11,000 crore.

Last month, a high-level Sebi committee headed by former RBI governor Bimal Jalan suggested disallowing the stock exchanges to list themselves, as it feared that self-listing would come in way of the regulatory role of the bourses.

However, market sources said that no-listing proposal could dampen the sentiments of entrepreneurs willing to set up bourses as also their investors, as business entities would seek to realise the returns on their investments.

Besides, they added that retail investors would not be able to invest in the absence of listing by bourses.

A number of stock exchanges across the world, including in developed markets such as the US, Canada and Japan as also exchanges in emerging markets such as Dubai, Malaysia and Africa are listed.