Capital market regulator SEBI today directed Saurashtra Kutch Stock Exchange Ltd (SKSEL) to compulsorily exit equity trading business.

The Securities and Exchange Board of India (SEBI) said that Saurashtra Kutch Stock Exchange has substantially complied with the conditions for its exit as per the regulator’s framework and therefore “is a fit case for compulsory exit”.

SKSEL was recognised as a bourse for a period of 3 years commencing on July 10, 1989. The said recognition was renewed from time to time until it was withdrawn by a SEBI’s order on July 5, 2007 on account of various non-compliances.

In 2008, the SEBI issued norms wherein it laid down the framework for exit by stock exchanges whose recognition is withdrawn and/or renewal of recognition is refused by the regulator and who may want to surrender their recognition.

Again in May 2012, the regulator issued new guidelines under which recognised stock exchanges were given two months time to make the application for exit failing which such bourses would be subject to compulsory exit process.

“SKSEL, a recognised stock exchange failed to make an application within two months under the 2012 exit circular and therefore is subject to compulsory exit process,” the SEBI noted.

Accordingly, in order to complete the exit of SKSEL, the regulator in consultation with the bourse appointed a firm in November, last year, for verification and valuation of assets and liabilities of the exchange.

From the valuation report, the SEBI found that the exchange complied with the exit guidelines including all the known liabilities have been brought out and that there is no future liability.

Earlier, the SEBI had allowed HSEL (erstwhile Hyderabad Stock Exchange) and Coimbatore Stock Exchange (CSX) to exit equity trading business.

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