Decks have been cleared for Kanpur-based Uttar Pradesh Stock Exchange (UPSE) to start its depository services. The Securities and Exchange Board of India (Sebi) has granted permission to alter the shareholding pattern of UPSE's subsidiary – UPSE Securities Limited.

Sebi had stipulated a minimum networth of Rs 3 crore to grant permission for opening a depository, while the current valuation of UPSE is pegged at merely Rs 2 crore. UPSE board members had written to Sebi seeking its nod to purchase one million shares of Rs 30 each from UPSE Securities, which would enhance its valuation to Rs 5 crore, thereby meeting the regulator’s standards for starting depository and currency futures business.

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UPSE Securities chief executive officer Ved Prakash Mishra told Business Standard that the permission had opened a host of avenues for increasing the business in the stock exchange and the application procedure for the NSE membership would be completed by this month-end.

UPSE executive director Bharat Kumar Nadhani said the Sebi nod would also enable the opening of a demat facility within two months. “The transaction rates have been agreed upon in a recent board meeting. We will charge Rs 250 from individuals and Rs 750 from companies, apart from Rs 15 transaction fee per delivery,” he said.

The demat facility is expected to begin by this month-end when the Sebi chairman is expected to visit the exchange. The Multi-Commodities Exchange (MCX) has also tied up with UPSE to begin currency futures trading in the city, enabling the traders to hedge their risks against market fluctuations.

The MCX-SX has also decided to impart short-term training to the local brokers in currency trading.

According to Mishra, these steps would promote the exchange’s acceptability as a multi-functional exchange.

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