Cos listed on VSEL to move on BSE dissemination board

The move is effective from tomorrow

To safeguard the interest of investors in firms listed solely on exiting bourses, BSE has placed as many as 50 companies listed on Vadodara Stock Exchange to the dissemination board (DB).

The move, which is effective from tomorrow, would allow buyers and sellers of the securities of these companies to disseminate their bids or offers using the services of trading members at BSE.

The decision follows after the capital markets regulator Sebi allowed Vadodara Stock Exchange to exit the business.

In a circular, BSE said "50 companies which are exclusively listed on Vadodara Stock Exchange (VSEL) will be available on Dissemination Board of BSE from Friday November 13, 2015."

Among the firms are Alps Laboratories, Baroda Polyplast, Bharat Parenterals, Kanoria Capital Services, Whiteway Products and Quality Steels and Forgings.

BSE's DB is an information disseminating mechanism made available on the bourse's website for buyers and sellers of the companies that are listed exclusively on exiting or de-recognised Regional Stock Exchanges (RSEs) and have failed to obtain listing on any RSE.

The board is required to be set up by stock exchanges having nationwide trading terminals such as BSE.

"Trading members are requested to note that the companies admitted to BSE Dissemination Board are not listed with BSE (are treated as unlisted companies)," BSE said.

"There will be no listing agreement executed by BSE with these companies," it added.

The exchange also said that there would be no monitoring of any compliance with respect to filings made by these firms and information received from them would be disseminated on the DB platform.

Under the BSE dissemination board, brokers of the exchange would act as "point of contact" for registered client, executing the bid or offers placed.

Under the mechanism, there is no matching of trades on the board and they are cleared and settled outside BSE or Indian Clearing Corporation.

Investors, on their part, also do not have any recourse to the investor grievance redressal mechanism, including arbitration and investor protection fund.

As per Sebi's norms, firms listed exclusively on exiting or de-recognised Regional Stock Exchanges (RSEs) are required to seek listing on at least any other RSE that is not seeking de-recognition and exit.

However, those companies which fail to list on any other RSE are treated as unlisted entity and have to be moved to dissemination board.