Sep 04 2007 Saibal Dasgupta in Beijing
India's securities regulator has cancelled a 64-year-old stock exchange's licence for its failure to segregate trading rights from ownership rights over the exchange. The Securities and Exchange Board of India has been overseeing the process of "demutualisation", the official term for this kind of segregation, across different exchanges in the country.
The Hyderabad Stock Exchange failed to implement the demutualisation process, which involves offloading a portion of the stock to the public, before its deadline of August 28, SEBI said in a statement.
"Consequently, in terms of Section 5(2) of the Securities Contracts (Regulation) Act 1956, the recognition granted to HSE stands withdrawn with effect from August 29," the regulator said in a statement.
HSE officials said they tried to offload 51 per cent of its shares but there were no takers. They said the exchange would look at new areas of business other than trading in stocks. At one stage, HSE considered merging itself with the Mumbai Stock Exchange but it can no longer go for this option following the cancellation of its licence.
