Ahmedabad Stock Exchange (ASE), the second oldest bourse in the country after BSE, has decided to go in for voluntary exit and surrender its licence as a regional bourse. At the extraordinary general meeting of ASE on July 5, 2014, a resolution to this effect was passed to adopt the procedure suggested by Sebi.
ASE will continue to work as a capital market and the broker arm. We will sit with Sebi and sort out the issues. The process may take up to two years, said PK Laheri, ASE public director.
Two years ago, Sebi had issued guidelines where the regional stock exchanges got a deadline of March 31, 2014, to either perform or perish. The regional stock exchanges had to meet certain turnover criteria to continue to operate, failure of which would lead to their derecognition as stock exchanges. They could, however, continue as a company and trading arms. Currently, ASE Capital Market, a subsidiary of ASE is working with the terminals of BSE and the National Stock Exchange (NSE).
The ASE had a golden time in the 90s when there were about 4,600 companies listed on the exchange. Established in 1894 as a public charitable trust under a banyan tree, the exchange survived the test of time as it entered the e-trading days. However, after the slowdown in 1995, the market never picked up. As per the annual reports of ASE, there were 2,247 companies still listed with the exchange as of March 31, 2013, mostly because of emotional attachment with the exchange. However, the trading on the stock exchange has been suspended since 2004.
Similarly, Vadodara Stock Exchange (VSE), another regional stock exchange of Gujarat is also convening a meeting of the board of directors of VSE on July 11 to discuss the development with respect to voluntary closure of the bourse. The Saurashtra Kutch Stock Exchange in Rajkot, the third RSE in Gujarat has already concluded the process of voluntarily exit and Sebi had approved the exit in April last year.