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The Calcutta Stock Exchange (CSE), which had seen a halt in its trading activity since 2013, was striving to restore its glory by setting up a clearing corporation as a separate legal entity.
The iconic stock exchange wanted trading on C-Star (the online platform of CSE), which was stopped by the Securities and Exchange Board of India (SEBI) in April 2013, to resume, a source close to the development told PTI.
"The CSE has written to SEBI seeking an in-principle approval for setting up a clearing corporation," he told PTI.
The source said the CSE had already formed its own clearing corporation - Lyons Range Securities Clearing Corporation and necessary application were filed for its incorporation on the portal of Union ministry of corporate affairs (MCA).
A study conducted by Nomura Research Institute and National Institute of Securities Markets of SEBI showed there was the rationale for the continuance of CSE business and that the exchange had a larger role to play in the penetration of equity trading culture in the eastern region, he said.
Globally, the source said, even Turkey and the UK had multiple exchanges even as India boasts of just three - BSE, NSE and the Metropolitan SE (MSE).
"The CSE meets the criteria for the formation of the clearing corporation in terms of net worth, which is currently Rs 103 crore, and the required seed capital," the source revealed.
In the past, too, the exchange had sought permission to carry out activities from its own clearing house but the SEBI was not keen on the idea. "Hence, the SEBI stopped the trading activity of the CSE," he said.
If the trading activity was not resumed, the exchange would be forced to shut down due to falling in operational income, which was now limited to trading in permitted stocks of BSE, he asserted, adding that the collection from listing fees was also on the decline.
The bourse had also obtained permission for commercial exploitation of its three-acre-land parcel on EM Bypass and it is currently engaged in discussions with property consultants, the source added.