Sebi allows Delhi Stock Exchange to exit stock bourse business

Markets regulator Sebi on Monday allowed Delhi Stock Exchange (DSE) to exit the stock bourse business following a request from the exchange.

DSE made a request to Securities and Exchange Board of India (Sebi) in May 2014 for exiting the stock exchange business.

The regulator in November 2014 withdrew the recognition granted to DSE citing "serious irregularities" in the functioning of the bourse. DSE moved the Securities Appellate Tribunal (SAT) against Sebi's order.

The Tribunal, in June last year, directed DSE to furnish the requisite information to Sebi within three months for the voluntary de-recognition sought by the bourse. Also, it had directed Sebi to complete the voluntary de-recognition process within five months by determining the quantum of amount payable.

Subsequently, Sebi determined the amount payable by DSE and communicated the same. In view of the operational difficulty, the regulator had sought an extension of two months to pass the exit order. The Tribunal had granted the same in November 2016.

In an order passed today, Sebi said DSE has substantially complied with the conditions for its exit as per the regulator's framework and therefore "is a fit case to allow exit".

Sebi said DSE complied with the regulator's exit norms and made payment of necessary dues to the regulator, including 10 per cent of the listing fee and the annual regulatory fee. Among other things, Sebi said, the exchange has complied with the guidelines wherein it has stated that there are no arbitration disputes /investor complaints pending against it.

"From the valuation report and undertaking of DSE, it is observed that all the known liabilities have been brought out and that there is no other future liability that is known as on date," Sebi said.

The regulator has asked the DSE to change its name and not to use the expression "stock exchange" or any variant of this expression in its name, among other things.

DSE, formerly known as Delhi Stock Exchange Association Ltd, was incorporated in 1947. It was later granted permanent recognition on March 1, 1982, as a stock exchange.

Sebi, in May 2012, had issued the guidelines for exit of stock exchanges.

Last week, Sebi chairman U K Sinha said 13 regional stock exchanges have closed in the last three years under the exit policy of Sebi, including Bangalore, Hyderabad and Madras Stock Exchanges.