SEBI sets rules on exit option for regional SEs
Dec 30,2008 00:00 by admin
The Securities and Exchange Board of India (Sebi) on Tuesday issued guidelines on exit opportunities for regional stock exchanges
(RSEs).

 The Sebi board has approved the broad guidelines, which provide an exit option to such regional stock exchanges whose recognition is withdrawn or renewal of recognition is refused by Sebi, and those exchanges who may want to surrender their recognition.

As per the said guidelines, such RSEs (or their successor entities) may be permitted to retain movable and immovable assets and to deal with such assets as they deem fit, subject to compliance with certain conditions.
The Investor Protection Fund, Investor Services Fund, 1% security deposit available with these exchanges will be transferred to the Sebi Investor Education and Protection Fund. The 1% security deposit will subsequently be returned to the issuer company in due course on satisfying the prescribed conditions.

Statutory dues outstanding to the regulator, including 10% of the listing fee and the annual regulatory fee, will also have to be transferred to Sebi. After de-recognition, the trading members of RSEs will cease to be trading members and therefore, liable to be de-registered as stock brokers. The brokers/trading members will also be liable to pay Sebi registration fees as per Schedule III of the Sebi regulations till the date of such de-recognition.
In case the stock exchange, after de-recognition continues as a corporate entity, it cannot use the expression ‘stock exchange’ in its name or in its subsidiary’s name, in order to avoid any present or past affiliation with the stock exchange. However, the subsidiaries of such exchanges can continue to function as any other normal broking entity with a suitable change of name.

For companies, which are listed on such de-recognised RSEs and also listed on any other stock exchange, it can continue to remain listed on the other stock exchange. In case of any company exclusively listed on those de-recognised stock exchange, it will have to mandatorily seek listing on another exchange or provide for exit option to shareholders after taking their approval for the same.

In case of sale/distribution/transfer of assets/winding up of such exchange/companies, the various Income Tax, Companies Act and Stamp Act, etc, would be applicable. The RSE will also have to set aside sufficient funds in order to provide for settlement of any claims, pertaining to pending arbitration cases, arbitration awards and unresolved investors grievances lying with the exchange.


http://economictimes.indiatimes.com/Markets/Indices/SEBI_sets_rules