The Hindu Business Line : CSE prepares plans to corporatise itself

THE Calcutta Stock Exchange, which plans to corporatise itself, has presented its memorandum and articles of association as a run-up to its forthcoming annual general meeting, scheduled for later this month.

The memorandum paves the way for a host of activities, including those related to the commodity and debt markets. The objects incidental or ancillary to the attainment of the main objects include operation of such segments as derivatives and cash.

CSE, which has proposed to enforce rules pertaining to issuers and intermediaries operating in the securities and commodities markets, also plans to regulate and fix the amount of commission, brokerage and other charges to be levied by members. It further plans to facilitate clearing and settlement as well as resolve claims and disputes of various categories.

The exchange hopes to provide for mechanisms for fulfilling various "contractual obligations" - including creation of funds for settlement guarantee, investor protection and compensation against claims of bad deliveries.

Additionally, CSE may promote or hold equity in associate ventures; it may even become member of other exchanges, including those dealing with commodities and currencies. CSE may also sponsor agents to establish clearinghouses, stock holding corporations and depositories.

The proposed CSE (Demutualisation) Scheme 2005 had referred to the `The Calcutta Stock Exchange Association Ltd' as an entity limited by shares and registered under the Companies Act, 1913, which has been recognised as a stock exchange by the Government under the Securities Contracts (Regulation) Act, 1956 (SCRA), on a permanent basis.

The Scheme also refers to a `trading member' - a stockbroker registered with SEBI under the SEBI (Stock Brokers and Sub-Brokers) Regulations, 1992. A trading member may not be a shareholder, while a shareholder may not be a trading member.

There has to be a governing board, to be formed in accordance with the articles of association in force from time to time. In addition, the Scheme provides for a chief executive (as an ex-officio director).

The new-look CSE may at any time list its shares on a recognised stock exchange. The exchange will need to ensure that at least 51 per cent of its shares are held by the public other than shareholders having trading rights. CSE further needs to transfer the clearing function to a clearinghouse recognised under SCRA.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Coromandel Fert plans stock split

`ILM, the new wave in the making'

Cos with Indian accounting norms can list on LSE

CSE prepares plans to corporatise itself