Calcutta Stock Exchange Closure: A Look Back at Its 117-Year History
The Calcutta Stock Exchange (CSE), one of India’s oldest and most iconic bourses, is preparing to bid farewell as it moves towards a voluntary exit after years of regulatory hurdles and legal challenges. If this transpires, this will mark the end of a 117-year-old journey for the exchange, which was once a formidable rival to the Bombay Stock Exchange (BSE).
History of the Calcutta Stock Exchange
Founded in 1908, the Calcutta Stock Exchange was a major financial hub in Eastern India, dominating trade volumes and serving as the financial nerve centre of Kolkata’s Lyons Range. The exchange played a significant role in the development of the Indian stock market, providing a platform for companies to raise capital and for investors to trade securities.
However, the exchange’s decline began after the Rs 120-crore Ketan Parekh scam, which led to broker defaults and dealt a severe blow to investor confidence. Trading activity steadily declined over the years during the 2000s, leading to the Securities and Exchange Board of India (SEBI) suspending the operations in 2013 following repeated non-compliance with regulatory requirements.
Regulatory Hurdles and Legal Challenges
Trading at the CSE was suspended by SEBI in April 2013 due to non-compliance with regulatory requirements. Over the past decade, the exchange made many attempts to resume operations and contest SEBI’s decisions in court. However, the exchange faced significant regulatory hurdles and legal challenges, which ultimately led to its decision to seek a voluntary exit.
According to CSE chairman Deepankar Bose, the exchange has obtained approval from shareholders to exit the stock exchange business and has submitted an exit application to SEBI. If SEBI gives its nod, CSE will remain a holding company with its subsidiary, CSE Capital Markets Pvt. Ltd. (CCMPL), carrying on broking business on the National Stock Exchange (NSE) and BSE.
Impact on Indian Regional Bourses
The CSE’s closure marks the end of an era for India’s regional stock exchanges, which once thrived before trading activity consolidated around Mumbai’s electronic platforms. The closure of the CSE will have significant implications for the Indian stock market, as it will lead to a further consolidation of trading activity on the NSE and BSE.
For investors, the closure of the CSE may not have a significant impact, as most trading activity has already shifted to the NSE and BSE. However, the closure of the exchange will be a significant loss for the city of Kolkata, which has a rich history of stock market trading.
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Conclusion
In conclusion, the Calcutta Stock Exchange’s closure is a significant event in the history of the Indian stock market. The exchange’s 117-year journey has come to an end, marking the end of an era for regional stock exchanges in the country. As the Indian stock market continues to evolve, it is essential for investors to stay informed about the latest developments and trends.
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