UP brokers to approach Modi

Various circulars issued by market regulator during 2012, have created trouble for smaller firms and brokers

The Uttar Pradesh Stock Exchange Brokers Association is planning to make a representation to the Bharatiya Janata Party’s prime ministerial candidate, Narendra Modi, against the Securities and Exchange Board of India (Sebi)’s regulation for regional stock exchanges (RSEs).

The Ahmedabad and Vadodara exchanges have already approached a court in this regard, while the UP Stock Exchange Brokers Association and the Vadodara Stock Exchange have also filed a separate petition in a high court. Sebi has filed a transfer application in the Supreme Court.

In a letter to RSEs, Sushil Kumar Kanodia, president, Uttar Pradesh Stock Exchange Brokers Association, asked them to send nominees from the broking community to make a joint representation to Modi. A copy of the letter is available with Business Standard.

“Currently, all RSEs are fighting for the same cause, that is, to save their existence from the cruel hands of the Sebi circular dated May 30, 2012, and the SECC (Stock Exchanges and Clearing Corporations) Regulations, 2012.”

The association said various circulars issued  by Sebi in 2012 had led to hurdles for small firms and brokers. These include the May 30, 2012, circular on an exit policy for de-recognised/non-operational stock exchanges; SECC Regulations, 2012, dated June 20, 2012; a circular dated December 13 on procedural norms on recognition, ownership and governance of stock exchanges and clearing corporations; and a circular dated December 19, 2012, on the requirement of base capital for stock brokers and trading members.

Kanodia told Business Standard he had been writing to all RSEs, Members of Parliament (MPs) and chief ministers; only four MPs had replied.

Small companies, worth up to Rs 12 crore, played a major role in the country’s economy and the Sebi regulation denied these firms the opportunity to grow, Kanodia said.