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6 members drop out of CSE race

Our Bureau

KOLKATA, Dec. 28

EVEN as the Securities and Exchange Board of India (SEBI) was busy deciding on the proposed demutualistion of the bourses, the broker-members of the Calcutta Stock Exchange (CSE) readied themselves for a contest-free election on December 30 for the nine directorial berths on the bourse's governing committee.

Six broker-members withdrew their nominations leaving only nine to sail through an uncontested poll. The CSE will hold its AGM on Saturday in the shadow of SEBI's expected move towards demutualisation. Mr J.M. Chowdhury, a former President, and Mr Vivek Mahajan, a former Vice-President, were among the nine candidates in fray for the nine director's positions.

The questions of ownership and participation of brokers in the management of a stock exchange were expected to be addressed by SEBI. The regulator's decisions on the above issues would first be effective on the CSE, virtually akin to a test case for SEBI . The CSE management is holding the AGM and the election subject to the regulator's decisions.

Ms Deena Mehta, former Vice-President of the Bombay Stock Exchange told Business Line over telephone that the broking fraternity of the country was ready to accept demutualisation.

The issue of separation of ownership and trading rights is not a point of debate any more, said Mr Ajit Day, a former CSE President. However, what is at stake is the issue of participation and the methods by which the ownership would be segregated from t he trading rights. If SEBI tilts towards the NSE model, the broker's participation would be zero, Ms Mehta said.

Otherwise, the option was for a 60:40 model by which public representatives and nominated directors/professionals would dominate the decision-making body of an exchange.