SEBI de-recognises Hyderabad Stock Exchange

As per Securities Contracts (Regulation) Act, 1956, every recognized stock exchange whose scheme for corporatisation and demutualisation has been approved by SEBI shall ensure that at least fifty-one per cent of its equity share capital is held by the public other than shareholders having trading rights, within twenty four months from the date of publication of the scheme.

SEBI had notified The Hyderabad Stock Exchange Ltd. (Corporatisation and Demutualisation) Scheme, 2005 on August 29, 2005. The Hyderabad Stock Exchange Ltd. (HSE) has failed to dilute 51% of its equity share capital to public other than shareholders having trading rights on or before August 28, 2007.

Consequently, in terms of section 5(2) of the Securities Contracts (Regulation) Act, 1956 (SCRA), the recognition granted to HSE stands withdrawn with effect from August 29, 2007.

SEBI has earlier passed an Order on July 6, 2007 withdrawing the recognition of Saurashtra Kutch Stock Exchange Ltd. (SKSE) ...Read details

NOTE- A stock exchange can also sell up to 26 per cent stake to foreign direct investors and up to 23 per cent equity to foreign institutional investors. However, not more than five per cent of equity could be sold to a single entity.

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