Mumbai: The stock market regulator Securities and Exchange Board of India will compulsorily derecognise exchanges with less than Rs 1,000 crore annual turnover and not applying for exit within two years.
Stock exchanges with an annual turnover of less than Rs 1000 crore are eligible to voluntarily exit, said SEBI in a circular on Wednesday. Derecognised exchanges need to file for exit within two months. Failure to do so would result in their compulsory exit, it said.
Exclusively listed companies on such exchanges have two options, said SEBI. The first is to list with a nationally present stock exchange. If a company fails to obtain listing, it would be traded through a dissemination board set up by nationally present stock exchanges.
These boards would match orders and enable trading, but would not issue contract notes and settle trades through their clearing house. Brokers of these exiting stock exchanges have been allowed to trade in nationally present stock exchanges through the former's subsidiaries.
Exiting exchanges may distribute their wealth under extant regulation after payment of statutory dues. However, 20 per cent of their wealth post-tax would go to SEBI's Investor Protection and Education Fund to cover future liabilities.
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