Calcutta Stock Exchange waiting for Sebi's formal death sentence: Minister of State Pankaj Chaudhary

The Calcutta Stock Exchange (CSE), one of the oldest share exchanges in Asia, is waiting for the formal death sentence from market regulator Sebi, the Parliament was informed on Tuesday. Established in 1908, CSE is the second oldest in India after BSE, and was on the verge of celebrating its 125-year anniversary.

During a reply to the question of West Bengal MP Samik Bhattacharya in Rajya Sabha, Union Minister of State for Finance Pankaj Chaudhary said that Sebi is examining CSE's proposal for voluntary exit as a stock exchange. This implies CSE would cease to exist as a stock exchange once the die is cast by Sebi formally.

“On February 18, 2025, CSE submitted a proposal for voluntary exit as a stock exchange under the Sebi-prescribed Exit Policy for Stock Exchanges. The proposal is currently under examination by Sebi,” Chaudhary informed.

According to sources, the beleaguered stock exchange has no options to remain afloat. It tried to float a clearing corporation to stay as a stock exchange, and for this, it wanted to sell a land parcel on the EM Bypass in Kolkata for Rs 253 crore to raise capital. But it did not get the requisite approvals.

Incidentally, at one point in time during 1997 to 2000, CSE’s daily turnover used to surpass BSE many days. The exchange used to clock an average daily volume of Rs 1,000 crore till mid-2001.

“We can recount in many such days CSE volume was only second to NSE. In one day in the year 2000, CSE had booked a volume of Rs 2,000 crore as well,” a former broker of CSE said.

Till 2005, the number of listed companies in CSE was more than 4000. The number was at that point in time more than NSE and almost equal to BSE. Since 2013, the trading has been closed in CSE.

In his reply, the minister said that Sebi, in view of non-compliance by CSE with the applicable regulatory requirements and the SEBI Exit Circular dated May 30, 2012, initiated compulsory exit proceedings against the exchange in May 2015. CSE filed writ petitions before the Calcutta High Court challenging SEBI’s action.

“After prolonged litigation, the Calcutta High Court, by its order dated February 19, 2024, granted CSE six months to either establish a clearing corporation or tie up with an existing one, in compliance with the Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) Regulations, 2018, failing which SEBI would be free to proceed in accordance with law,” he added.