The Telegraph
Since 1st March, 1999
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Lyons Range shutdown spills over

Calcutta, Nov. 15: Stockbrokers across the country are planning to go on a one-day strike in protest against the capital market regulator’s indifference towards regional stock exchanges and the astronomical turnover tax levied on them.

The Association of NSE Members of India met in Chennai today and discussed if they could join hands with “brothers in Lyons Range”. After the meeting, members of the association said a nation-wide strike next week was being considered, but it had not been finalised yet.

The BSE Brokers’ Forum has convened a meeting on Monday, in which it will discuss what steps it could take. Deena Mehta, a prominent member of the Bombay Stock Exchange, said: “We have full support for our brothers in Calcutta. We appreciate how pathetic their situation is.

“In the meeting on Monday, we will decide how we could help stockbrokers in Calcutta. We have our own issues as well. Most brokers in the country cannot afford the turnover tax levied on them by Sebi. A clear picture will emerge after the meeting on Monday.”

The Supreme Court had upheld Sebi’s rights to collect a regulatory fee from the brokers, but did not specify the quantum, Mehta said. “Sebi must appreciate that the brokerage earned by an intermediary today is much less than 10 years ago. So the tax has to be calculated accordingly,” she added.

Brokers of regional stock exchanges are worse off. With investors dropping out of sight, many regional bourses have already closed down, while Calcutta Stock Exchange (CSE) — the most prominent among them — is fighting for survival.

The Kania Committee’s recommendations on the future of regional bourses made matters worse for them. Regional bourses cannot float subsidiaries anymore to seek membership of the larger exchanges.

“The Kania Committee says the regional bourses must merge amongst themselves or with the two larger bourses. But the question is who would initiate the move to merge them. Will Sebi initiate the move'” asks Ajit Day, former president of the Calcutta Stock Exchange.

Meanwhile, the seven-day strike in Calcutta got off to a reasonably impressive start today. Very few brokers traded on CSE today.

The exchange logged a turnover of Rs 1.94 crore. Most of those who traded today logged in to square off their outstanding positions.

Trading at 7, Lyons Range came to a near standstill. Most brokers who operate out of the building did not even trade on the other bourses.

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