SC spikes Saurashtra Stock Exchange plea

The Economic Times 11 Mar. 08 Tuesday P 8 Delhi

THE Supreme Court on Monday dismissed an appeal of the Saurashtra Kutch Stock Exchange (SKSE), challenging withdrawal of its recognition by the Securities & Exchange Board of India (Sebi). The apex court upheld Sebi’s power to withdraw recognition of stock exchanges. A bench comprising Justice SH Kapadia and Justice BS Reddy dismissed the SKSE’s plea.

The exchange said the central government had conferred power on Sebi to withdraw recognition of stock exchanges. The board cannot delegate this power to its members. However, Sebi counsel Pratap Venugopal said exercise of powers by whole-time members of the marker regulator is not only under section 5 of the Securities Contract (Regulation) Act, 1956 but also under section 11 read with section 19 of the Sebi Act, 1992. It is also in consonance with the government notification of 1994 which conferred such power on the board, said the counsel.

SKSE in its appeal had said: “The notification of 1994 does not say that the power under section 5 of SCR Act can also be exercised by any other member of the board. An objective regarding the notification clearly shows that the Centre never intended the power to withdraw recognition be left to any one member of the board.”

With thanks from The Economic Times
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