SEBI Chief Cites Liquidity and Tech Hurdles to Calcutta Stock Exchange Revival — October 31, 2026
Any proposed comeback of the historic Calcutta Stock Exchange (CSE) will critically depend on its ability to generate liquidity, establish a sustainable business model, and commit to large-scale technological investments, Securities and Exchange Board of India (SEBI) Chairman Tuhin Kanta Pandey has indicated.
Speaking at an industry event, the market regulator clarified that existing norms do not prohibit the establishment or revival of exchanges, but any entity entering the landscape must clear high operational, financial, and governance benchmarks.
Key Hurdles Highlighted by the Regulator
The SEBI chief outlined several structural obstacles facing the defunct regional bourse:
- Liquidity and Order Execution: The Indian equity trading landscape is heavily consolidated between the National Stock Exchange (NSE) and the BSE. A revived bourse would face immense pressure to attract brokers, institutional capital, and retail trading volumes necessary to offer narrow bid-ask spreads and swift order execution.
- Rising Technology and AI Costs: Market operators must continuously invest in high-capacity trading engines, surveillance systems, cybersecurity infrastructure, and risk mitigation tools to handle modern market risks, including those posed by artificial intelligence.
- Irrelevance of Geography: In a fully digital marketplace where investors trade remotely through online brokerages nationwide, physical location no longer confers a competitive advantage.
- Capacity of Existing Platforms: The nation's prevailing stock exchange infrastructure already possesses the bandwidth to process much larger transaction volumes without systemic bottlenecks.
Background of the Revival Effort
Established over a century ago, the Calcutta Stock Exchange was once among India's most active trading floors. Equity trading on the exchange was suspended by SEBI in April 2013 due to compliance non-adherence, governance lapses, and insufficient clearing and settlement infrastructure.
Following prolonged legal challenges, the bourse filed an application for voluntary exit from its stock exchange operations in February 2025. However, the issue returned to the spotlight after the West Bengal government announced budgetary intentions to support the institution's turnaround to help position Kolkata as an eastern financial centre.
In July, the CSE approached the capital markets regulator requesting that its exit application be kept on hold. The bourse has also explored compliance pathways, such as equity trade interoperability through the clearing arms of the NSE or BSE, as setting up an independent clearing corporation poses significant capital and regulatory hurdles.
SEBI has maintained that while the exit application remains in abeyance, any path to renewed operations must be backed by a clear commercial rationale rather than regional legacy alone.
