The Hindu Business Line : `Subsidiary route not long-term solution for regional stock exchanges'

ASSERTING that the subsidiary route adopted by the regional stock exchanges (RSEs) to be a part of the stock market action would not take them very far, the SEBI (Securities and Exchange Board of India) Chairman, Mr M. Damodaran, has underscored the need for some "right thinking people" to hand-hold the smaller exchanges and help find where the future lies for them.

The SEBI Chairman is keen that the big boys in the business (NSE and BSE) look at devising business plans with regard to other smaller exchanges. He also admitted that these two exchanges would prefer to be tight-lipped on this issue.

"Setting up subsidiaries and then becoming part of the action is alright to address the issue (of survival) for short term, but it will not take you (RSEs) very far," Mr Damodaran said at a recent industry gathering here.

The SEBI Chairman highlighted that the artificial subsistence of RSEs had disappeared after the compulsory listing in such exchanges became a matter of the past and the big boys in the business made life difficult for the smaller exchanges.

In all, there are about 15 subsidiaries of RSEs that are trading in the two major stock exchanges of the country — the National Stock Exchange and the Bombay Stock Exchange. SEBI had given the RSEs a year's time to demutualise themselves and organise themselves into corporate form.

The SEBI Chairman compared the current situation of the RSEs and its subsidiaries to a parent hanging loose and a child left alone in the market.

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