The BSE Brokers Forum, an association of broker shareholders of the Bombay Stock Exchange, will approach the Securities and Exchange Board of India, or Sebi, to voice their concerns over the proposals of the Bimal Jalan Committee set up to look into the governance, ownership and listing issues of stock exchanges.

The brokers are unhappy over the proposal to disallow the listing of stock exchanges. They feel the proposal defeats the very purpose of the corporatisation and demutualisation scheme under which the brokers were allotted shares against membership cards they were holding in the erstwhile BSE.

In 2007, Asias oldest bourse completed the demutualisation process to ensure that at least 51% of its equity was held by the public. Since then, many of its broker shareholders and also public shareholders, including large institutional investors, corporates and foreign investors like Deutsche Bourse and Singapore Exchange, have been holding shares in the hope that they would eventually get a chance to exit with better returns.

We have set up a task force consisting of some of our committee members who will meet Sebi to convey our concerns over the Jalan report , a members of the forum said, requesting anonymity.

While the market regulator has invited public comments on the report by December 31, many shareholders have already taken a critical view of its recommendations as it denies them an exit option .

Sebi chairman CB Bhave, however, has publicly defended the report. The brokers are also irked by some of the other suggestions, particularly the one which does not favour profit maximisation by stock exchanges and another against giving representation to brokers on the board. If these recommendations are implemented, they would be detrimental to the interest of the BSE as a corporatised entity and also that of its shareholders, said a member of the exchange. We favoured the corporatisation and demutualisation scheme because we thought it will be implemented with its original features, the member said.

A few brokers, however, are of the view that stock exchanges should not be allowed to function as a commercial organisation and to share its profits as dividend.

Commercialisation of stock exchanges itself is debatable in the Indian context. There are some critical problems of listing, which stock exchanges will find difficult to deal with in their existing structure, said VK Singhania, director of Mumbai-based broking firm VNS Finance.