The defunct stock exchanges and those which are not able to maintain a turnover of Rs 1,000 crore will have to close shops within two years, market regulator Sebi said today.

"If stock exchange is not able to achieve the prescribed turnover of Rs 1,000 crore on continuous basis or does not apply for voluntary surrender of recognition and exit before the expiry of two years ... Sebi shall proceed with (their) compulsory de-recognition," Sebi said in a circular. According to its new guidelines, the de-recognised exchanges will have to apply within two months from today and upon failing to do so, they shall be subject to compulsory closure.

 

Sebi also mandated that the exclusively listed companies on such bourses shall be listed on any other recognised stock exchange by these.

The regulator further stated that the recognised stock exchanges may facilitate the listing of these exclusively listed companies on defunct bourses and can carry out changes in their listing criteria in the interest of investors.

About the exclusively listed companies on such bourses, which fail to obtain listing on any other stock exchange, the regulator said, "will cease to a listed company and will be moved to the dissemination board by stock exchanges."

In order to safeguard the interest of investors, a mechanism of dissemination board will be set-up by stock exchanges having nationwide trading terminals.

Under this mechanism, a buyer will be given an opportunity to disseminate their offers using the services of brokers of stock exchanges hosting such boards.

It is also mandated for these de-recognised stock exchanges that they will not alienate any of their assets without prior permission of Sebi. Currently, there are about 16 regional stock exchanges and most of them are defunct. (Business Standard)