Decline and Fall: The Story Behind the Calcutta Stock Exchange Shutdown

The Calcutta Stock Exchange (CSE), once a prominent player in India’s financial landscape, faced a significant shutdown in 2013, and has been navigating a complex path towards a potential resurgence.

Origins and Historical Significance The roots of stock-broking in Kolkata (formerly Calcutta) trace back to the 1830s, with formal operations commencing in 1863. The Calcutta Stock Exchange Association was officially established in 1908, making it the second stock exchange in India and Asia, following the Bombay Stock Exchange (BSE) founded in 1875. The CSE played a pivotal role in India’s financial evolution, especially after receiving permanent recognition from the Central government in 1980 under the Securities Contracts (Regulation) Act, 1956.

Troubles Leading to the Shutdown The CSE faced its first major setback with the Ketan Parekh scam in 2001. This scam, involving the manipulation of stock prices, had a severe impact on the CSE. Subsequently, in April 2013, the Securities and Exchange Board of India (SEBI) ordered the suspension of CSE’s trading operations on its platform C-STAR, citing non-compliance with regulatory norms. This decision was upheld by the Calcutta High Court, leading to a complete halt in CSE’s trading activities. The Exchange’s association with the National Stock Exchange (NSE), which allowed CSE members to trade on the NSE platform, became its primary function until NSE terminated this contract in 2023, further exacerbating the CSE’s challenges.

The Road to Recovery Despite these setbacks, the CSE has been making strides towards a comeback. Positive indications from SEBI and ongoing efforts to meet regulatory requirements hint at a potential revival. The Exchange’s chief general manager, Dhiraj Chakraborty, expressed optimism about adhering to necessary measures by January 2024 and resuming operations as an independent exchange with state-of-the-art technology by March-April 2024. The plan includes launching a new trading platform and expanding the portfolio to include currency and commodity trading.

The Current State and Future Prospects As of now, the CSE remains significant in the Indian capital market, with 1,842 listed companies and around 400 registered trading members. Its net worth meets the regulatory requirements. The Exchange’s total revenue for the Financial Year 2022-23 stood at Rs 17.88 crore, with a profit of Rs 4 crore.

The future of the CSE hinges on SEBI’s approval and the Calcutta High Court’s decision. If successful, the CSE could reemerge as a key player in India’s stock market landscape, alongside BSE and NSE, marking a remarkable turnaround from its decline and fall.



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