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A section on Lyons Range still maintains that RSEs have not lost their relevance, not even in the context of computerised trading

KOLKATA, Sept. 5

FOR a group of employees at the Calcutta Stock Exchange (CSE), the Kania group's report on regional stock exchanges, has raised old bogeys.

Reacting to the report, the employees said the death of a regional stock exchange (RSE) would further damage the country's economic balance. Over a period of time, the concentration of financial powers in one region (say, Mumbai) would not help the cause of other regions.

A panacea is being offered as well. As the CSE staffers stated, "If the Securities and Exchange Board of India cannot revive the smaller exchanges, it may bring in a directive to use the infrastructure available with them for creating regional hubs for the NSE."

It has also been suggested that the NSE should indemnify individual RSEs in some form or other, at least for a portion of the turnover generated from that exchange.

The RSEs, it may be mentioned here, are rather dependent on listing fees. A loss on this front will add to the RSEs' existing problems.

A section on Lyons Range still maintains that RSEs such as the one at Kolkata have not lost their relevance, not even in the context of computerised trading environment; these exchanges had successfully mobilised investments in the past and can regain lost ground with adequate support from policy-makers.

This group of CSE employees had earlier placed a memorandum before the SEBI brass, pointing out that the exchange was one of the oldest institutions of its kind. It also referred to the steep decline in prices during a recent period of crisis (March 2001) which led the exchange to direct a good amount of its reserves to safeguard investors' interests.

Despite such protective moves, members of the exchange had "migrated" to other bourses, particularly the NSE, either directly or indirectly, the employees stated. "CSE volumes have plummeted to insignificant levels and its survival has become impossible," the memorandum had mentioned.

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