Calcutta, May 22: The Calcutta Stock Exchange, one of the oldest stock exchanges in the country, today tried to put up a brave face as it stared at the possibility of being de-recognised by capital market regulator Sebi.

The stock exchange, which has seen its business dwindling over the years, has received a letter from Sebi asking the bourse to inform its shareholders about its failure to meet the regulatory requirement of a minimum annual trading turnover of Rs 1,000 crore.

The CSE board, which met today on the issue, expressed confidence that it would tide itself over the crisis.

The CSE is understood to be looking to approach Sebi to apprise the regulator of its potential agreements with regional stock exchanges to build a stronger capital market institution.

“Today’s board meet was to take cognisance of the letter from Sebi. It has asked the CSE to inform its shareholders that the exchange has not been able to comply with the regulatory requirement. Accordingly, CSE will hold an extraordinary general meeting within the third week of June based on Sebi’s instruction,” a director of the CSE told The Telegraph.

Sebi has further told the exchange that if it fails to comply, it will exercise its right to ask the institution to wind up.

The director further said the bourse could benefit from the change of guard at the Centre, giving it more time to work on its revival plan.

Sebi had originally proposed May 30 as the deadline to de-recognise non-compliant exchanges.

CSE managing director B. Madhav Reddy said, “I want to assure the broking community, employees and various stakeholders that we are confident that neither the board will be superseded, nor will it face a shutdown.”

“We are in advanced stages of agreement with other regional exchanges to make a stronger bourse for the country that would fulfil the aspirations of local small listed entities,” Reddy added.

On the CSE’s radar are tie-ups with weaker stock exchanges such as the Madhya Pradesh Stock Exchange and the OTC Exchange of India.

In 2008, Sebi had issued guidelines on exit options for regional stock exchanges. It said any regional bourse with an annual trading turnover of less than Rs 1,000 crore would be de-recognised.

In 2012, Sebi asked every stock exchange to have its own clearing corporation or outsource the same to a recognised clearing corporation. The bourses were also required to maintain a minimum net worth of Rs 100 crore.

The CSE, which had its own trading platform C-star, had sought exemption from Sebi for transferring its clearing and settlement activities to a clearing corporation. Its request was rejected and trading activities were stalled from April 4, 2013.

Reddy said the board was working towards a solution on the clearing settlement.

The Sebi directive has evinced mixed response from brokers associated with the exchange. While some are confident that the CSE board would be able to work out a solution to avoid a shutdown, others feel the management should have taken action earlier as Sebi had initiated the de-recognition process in 2008.

According to the 2012-13 annual report of the CSE, the exchange had a membership strength of 738 with 2,561 listed companies.