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The Calcutta Stock Exchange has sought a voluntary exit from stock exchange operations under Sebi's Exit Policy, following prolonged regulatory challenges and halted trading since 2013. Sebi has formed a Working Group and appointed a valuation agency to assess CSE's assets, liabilities, and regulatory requirements. Some information is still awaited from CSE. The regulator will decide on the exit after evaluating the exchange's exclusively listed companies, financial position, and any regulatory relaxations needed. The move follows missed deadlines set by the Calcutta High Court for compliance with clearing corporation and net worth norms.
The Securities and Exchange Board of India (Sebi) is currently examining the application submitted by the Calcutta Stock Exchange (CSE) for a voluntary exit from its stock exchange operations, as stated by Minister of State for Finance Pankaj Chaudhary earlier this week. Sebi has formed a Working Group to assess the matter and has appointed a valuation agency to verify and evaluate CSE's assets and liabilities. Some of the information requested from the exchange is still pending. Advertisement
The regulator plans to issue a detailed order allowing CSE to exit the stock exchange business after reviewing the status of companies listed exclusively on CSE, its financial position, and any regulatory relaxations necessary to facilitate the exit. The CSE had formally applied for voluntary exit under Sebi's Exit Policy for stock exchanges in a letter dated February 18, 2025. The proposal is currently under examination.
CSE's trading operations had already ceased in April 2013. The Calcutta High Court had previously extended deadlines to comply with clearing corporation arrangements and net worth requirements under the Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) Regulations, 2018, in orders issued in February and August 2024. However, the exchange was unable to meet these requirements within the given time frame, leading to its formal application for exit in February 2025.
Source PTI
FAQ
1. What is the current status of the Calcutta Stock Exchange (CSE)?
The Calcutta Stock Exchange has applied for a voluntary exit from stock exchange operations under Sebi's Exit Policy. Trading on the exchange had already been halted since April 2013. The voluntary exit request comes after prolonged regulatory challenges and missed deadlines for compliance with clearing corporation and net worth requirements.
2. Why is CSE seeking a voluntary exit?
CSE has struggled to meet regulatory requirements set under the Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) Regulations, 2018. The exchange missed deadlines set by the Calcutta High Court for compliance with clearing corporation arrangements and net worth norms. Faced with these challenges, the exchange formally applied for exit to Sebi on February 18, 2025.
3. What steps has Sebi taken to review the application?
Sebi has formed a Working Group to evaluate the exit proposal. Additionally, it has appointed a valuation agency to assess CSE's assets and liabilities, including verification of the exchange's financial position and regulatory obligations. The regulator is awaiting some information from CSE before making a final decision.
4. What factors will Sebi consider before approving the exit?
Sebi will examine multiple factors, including the status of companies listed exclusively on CSE, the exchange's financial position, and any regulatory relaxations that may be required to facilitate the exit. The regulator will also ensure that the exit process protects investor interests and complies with legal and regulatory frameworks.
5. When did CSE stop its trading operations?
CSE's trading operations ceased in April 2013, and the exchange has remained inactive since then. The voluntary exit application now seeks to formally conclude its stock exchange operations under Sebi's guidelines.
6. What role did the Calcutta High Court play in CSE's compliance?
The Calcutta High Court had issued deadlines in February and August 2024 for CSE to comply with clearing corporation arrangements and maintain minimum net worth as per regulations. The exchange was unable to meet these requirements, prompting the voluntary exit application.
7. What is the expected next step in the exit process?
Sebi will issue a detailed order after completing the assessment of CSE's assets, liabilities, and regulatory status. The order will formalize the voluntary exit, subject to verification of the exchange's compliance with Sebi's Exit Policy and protection of investors associated with exclusively listed companies on the platform.
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