Standard Chartered Bank seeks nod to set up stock exchange

Standard Chartered Bank has sought permission to operate a stock exchange in India.

The bank, through its Mauritius unit, has applied to the Foreign Investment Promotion Board (FIPB), a wing in the ministry of finance, last week.

Top representatives of the ministry of finance, commerce and home affairs, among others, are expected to vet the application soon.

The next FIPB meeting is slated for October 29, but the StanChart issue may be taken up only in November, sources said. In its proposal to FIPB, StanChart said it is also interested in creating a platform for trading in currency and interest-rate futures.

Stock exchanges have become an attractive business in India as the equity cult is growing thick and fast.

Turnover in India has nearly quadrupled from an average daily volume of Rs26,316 crore in 2005 to Rs109,020 crore in 2010 so far.

Profitability of exchanges have also risen accordingly. The National Stock Exchange (NSE), India’s largest bourse, is reported to have made a profit of `600 crore in last fiscal, while rival Bombay Stock Exchange (BSE) reeled in `293 crore.
Private equity players have been active in the exchange business over the last 6 months.

Thomas Caldwell and George Kaiser bought a stake in BSE in May this year through their respective investment companies, Urbana Corporation and Argonaut Ventures, respectively.
Famous investor and financial philosopher George Soros also picked up a 4% stake in the exchange in August. Temasek Holdings, an Asia investment company headquartered in Singapore picked up a 5% stake in the NSE in May.

BSE accounts for 25% share in the cash segment and virtually no volumes in the derivatives segment.

Its younger rival, the NSE has a nearly 100% share in derivatives turnover and an overall 75% share of cash volumes.
Standard Chartered Bank (Mauritius) Ltd was incorporated in Mauritius in 2003 as a wholly owned subsidiary of Standard Chartered Bank Plc.
— With inputs from Sachin Mampatta in Mumbai