10 April 2012

Stock exchanges - April brings pain

This is clearly the month of pain for stock exchanges.

1. NSE is reprimanded by SEBI today by an order.

2. SEBI goes in appeal to Supreme Court of India against Bombay High Court ruling in MCX-SX case and heard on 11th April. See Supreme Court's order here.

3. SEBI comes out with new governance and other norms for exchanges and market infrastructure institutions - which are good, bad and ugly. Mainly, the new regulations would be painful for exchanges. More about that in a forthcoming column.

4. Madhu Kannan, CEO of BSE quits or rather chooses not to renew his term.


Anonymous said...

A basic doubt. The SC here directs SEBI to amend its regulations reg. legality of buybacks. Now SEBI's stand before the HC was that buybacks are in the nature of forward contracts and so already hit by S. 18 of the SCRA, which was rejected by the HC. This was a question of interpretation of an existing law. Now if SEBI outlaws buyback by amending its regulations, wouldn't it amount to SEBI imposing an additional restriction over and above those set out in SCRA? The HC did not permit SEBI to invoke S. 18A at such a late stage. Amending the regulations after the fact seems even more unfair.

-Mangesh Patwardhan

Sandeep Parekh said...

Mangesh, The order is not clear what it intends to state, so am not able to comment on it. But SEBI's position does appear unfair.