| The National Stock Exchange ( NSE) is planning to pick up stakes in the Chennai Stock Exchange and the Bangalore Stock Exchange. |
| According to sources close to the development, the exchange could pick up 5 per cent each in these exchanges as per the demutualisation norms laid down by the market regulator Securities and Exchange Board of India. |
| A fax query to the managing director of the NSE did not elicit any response. Most of the regional stock exchanges will have to divest 51 per cent of the stake to institutional or individual investors. |
| The government has fixed a limit of 5 per cent as the maximum holding by an institution or an individual. However, no final decision has been taken as yet since the board will have to approve the stake purchase, said the sources. |
| They added that if the decision to this effect is taken by the NSE, it will help promoting the regional stock exchanges. For the NSE, indications are that as of now this will be financial investment. |
| At a later date, the stock exchange may also promote a platform for an interconnected exchange for small and medium sector enterprises. If that happens, investment in regional exchanges will deliver fruits. |
| Earlier, the Sebi had mooted the proposal of promoting an exchange for SMEs as part of the existing stock exchanges. The objective of the SME exchange will be to provide capital to the SMEs to grow in size. |
| Subsequently, these entities could list on bigger exchanges which would be more of a formality since the national exchanges would have all the preliminary data for surveillance by then. |
| This was part of the recommendations of a Sebi committee in 2006, set up to come up with proposals to revive regional stock exchanges. As per the proposals, these exchanges could either bring in strategic partners or go for self listing through initial public offer so that they could provide a suitable platform for small and medium sector enterprise raise funds. |
| Similarly, the Bombay Stock Exchange is reported to have evinced interest in picking up five per cent stake in the Calcutta Stock Exchange. |
| While Price Waterhouse is advising the CSE for completing its demutualisation process, the BSE has appointed Ernst and Young as consultant. All regional stock exchanges will have to complete the process of demutualisation by September. |
Source: Business Standard