Markets regulator Sebi today allowed Cotton Association of India to exit the bourse business and withdrew its recognition.
The Securities and Exchange Board of India (Sebi), in February this year, informed Cotton Association of India (CAI) that since there was no trading operation on its platform for more than 12 months, it is liable to exit.
Following this, the Association decided to voluntarily surrender the recognition granted to it as a deemed recognised stock exchange.
In an order passed today, Sebi said Cotton Association of India has complied with the regulator's conditions for exit and is therefore "a fit case to allow exit" from capital markets.
"From the valuation report and undertaking of CAI, it is observed that all the known liabilities as on date have been brought out... and that CAI has substantially complied with the conditions contained in the exit circular, 2016," Sebi said in an exit order.
While allowing the exit, Sebi has asked the exchange to comply with tax obligations and not to use the expression "exchange" in its name, among others.
Cotton Association of India, formerly known as the East India Cotton Association Ltd, was granted recognition in June 1955, for organising and regulating forward contracts in cotton throughout India.
The volume of futures trade on CAI started to decline from 2001-02 and became nil in 2006-07 and no futures trading was conducted thereafter, Sebi noted.
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