1. The Committee has gone into two issues in its Report :

   (i) Listing of Securities on Stock Exchanges

   (ii) Delisting of Securities already listed on Stock Exchanges

2. In my opinion the Committee has gone beyond the terms of reference made to the Committee by going into the aspects of Listing of Securities. The terms of reference relate to only to go into various aspects of delisting of securities and not listing of securities. hence, the Recommendations of the Committee relating to pre-listing norms and the whole section 4 of drat report are beyond the scope of the terms of reference of the Committee.

3. The Committee’s Recommendation that the Ministry of Finance Circular No F14(2)/SE/85 dated 23 September 1985 is not called for as the recommendation goes into the listing of securities which is beyond the terms of reference of the Committee.

4. The above Circular was issued on the basis of the Recommendations of an Expert Committee appointed by the Government of India. The current scenario of the stock exchanges does not warrant any change in this regulation of asking the companies to list their securities compulsorily at the Regional Stock Exchanges on the basis of location of the Registered Offices and major activities (like location of factories etc.,) of the companies.

5. The listing of securities of companies on regional stock exchanges as is the practice now has to be viewed from the administrative supervision and control of the Companies in the interests of investors. If this provision is removed the companies, specially the smaller the smaller companies will scout for stock exchanges with the lowest listing fee and also those exchanges which in the opinion of the issuers of securities may not enforce regulations strictly.

6. While the advantages of continuing the present practice are significant, there are no advantages worth mentioning for discontinuing the practice of listing on regional stock exchanges and in the name of competition one may be inviting unhealthy practices.

7. In view of the above, Section 4 in general and the recommendations contained in Section 4 in particular are unwarranted.

Sd/-
T. Prem Kumar