SEBI chief sets three conditions for Calcutta Stock Exchange revival

Addressing a press conference, Pandey said the Securities and Exchange Board of India (SEBI) has made it clear that CSE will have to meet stringent financial, technological and regulatory requirements before it can resume trading.

The revival of the Calcutta Stock Exchange (CSE) will depend on its ability to attract sufficient trading volumes, build a sustainable business model and make substantial investments in technology, SEBI chairman Tuhin Kanta Pandey said in Kolkata on Saturday.

Addressing a press conference, Pandey said the Securities and Exchange Board of India (SEBI) has made it clear that CSE will have to meet stringent financial, technological and regulatory requirements before it can resume trading.

He made the remark while responding to a question on the BJP government’s proposal to revive the century-old exchange in the state.

The CSE must demonstrate a minimum net worth of Rs 100 crore and achieve an average annual turnover of Rs 1,000 crore to operate as a stock exchange, he said. However, trading on its platform has remained suspended since 2013–14, when the CSE’s annual turnover had dropped to around Rs 90 crore, the SEBI chief informed.

“The history of the Calcutta Stock Exchange goes back several decades,” Pandey said, adding that, “Most of the other regional stock exchanges have already wound down their operations. Now, if the Calcutta Stock Exchange wants to revive its operations, there are certain regulations that it must comply with.”

He said the CSE will need to submit a business plan and create the necessary infrastructure for the orderly execution of trades — including an online, screen-based trading system, online surveillance capabilities, cybersecurity controls and cyber-resilient framework, apart from a nationwide network of trading members with adequate facilities to admit and regulate them.

He added, “The CSE must settle all outstanding dues payable to brokers and other stakeholders, and establish a separate clearing corporation or enter into an arrangement with an existing clearing corporation for the settlement of trades.”

Story continues below this ad

The CSE needs to fulfil all the prescribed conditions, the SEBI chairman said, adding, “That is where the matter currently stands… If we receive any further communication from the exchange indicating its intention to continue operations, the proposal will have to be examined against these requirements.”