Pune Stock Exchange is the thirteenth Stock Exchange to exit under this SEBI policy, says a release from SEBI
SEBI (Securities and Exchange Board of India) has passed an Order on 13 April 2015 providing the exit to Pune Stock Exchange Limited (PSE). PSE is the thirteenth Stock Exchange to exit under this SEBI policy, according to a release from SEBI.
It may be recalled that SEBI vide Circular dated 30 May 2012 had issued the Guidelines for the exit of stock exchanges. This contained details of the conditions for exit of de-recognised/non-operational stock exchanges including treatment of assets of de-recognised/non-operational exchanges and a facility of Dissemination Board for companies listed exclusively on such exchanges, while taking care of the interest of Investors.
The recognition of PSE was last renewed by SEBI for a period of one year commencing on 2 September 2013 and ending on 1 September 2014. The renewal was, however, subject to the condition that the Exchange can commence trading only after complying with all the regulatory requirements imposed by SEBI and shall comply with such other conditions prescribed by SEBI.
PSE vide its letters dated 21 January 2014 and 23 January 2014 submitted that the Governing Board in its meeting held on 13 December 2013 has endorsed the decision of the shareholders of PSE in their Annual General Meeting dated 28 September 2013 to make application for voluntary surrender of recognition and exit of PSE as a stock exchange as per SEBI circular dated 30 May 2012.
SEBI in consultation with PSE on 13 March 2014 appointed M/s. D V Sathe & Co.as the Valuation Agency for verification and valuation of assets and liabilities of PSE. The Valuation Agency submitted its final report to SEBI on 23 May 2014.
From the valuation report and undertakings of PSE, SEBI observed that all the known liabilities have been brought out and that there is no other future liability that is known as on date. SEBI noted that PSE has substantially complied with the conditions contained in Exit Circular, 2012 subject to its undertakings. The SEBI Order hence stated, “I, therefore, am of the view that it is a fit case to allow exit to PSE in terms of clause 8 of the Exit Circular, 2012.”
SEBI had conducted an investigation into the allegations levelled by Pune Stock Exchange Brokers Forum in respect of matter pertaining to certain shareholders of PSE. The documents pertaining to Expression of Interest (EOI) and supporting documents related to demutualisation of PSE were directed to be sealed and kept under custody of the exchange by the inspection authority during the inspection conducted in December 2011. Regulatory action for
the alleged violations/ non-compliances by the concerned entities has been initiated.
However, the exit process of the stock exchange is delinked from such regulatory actions. In view of the same, PSE submitted an undertaking dated 16 March 2015, that "the exchange shall keep these documents in proper form in all conditions except condition beyond control & condition arising due to natural calamities and the same shall be made available to SEBI for any future reference or regulatory proceedings, if any".
Hence, the SEBI Order stated, “…allow the exit of Pune Stock Exchange Limited as a stock exchange and direct it to:-
(a) comply with its tax obligations under Income Tax Act, 1961;
(b) comply with the undertakings given by it to SEBI;
(c) comply with other consequential conditions of Exit Circular, 2012; and
(d) to change its name and not to use the expression “Stock Exchange” or any variant of this expression in its name and to avoid any representation of present or past affiliation with the stock exchange, in all media.
The SEBI The order shall come into force with immediate effect.
In conclusion, the SEBI Order added, “A copy of this order shall also be forwarded to the Income Tax Authorities, the Ministry of Corporate Affairs and the State Government of Maharashtra intimating the exit of Pune Stock Exchange Limited and for appropriate action at their end as per applicable laws.”