BSE shortlists 5 foreign exchanges for stake: paper

MUMBAI (Reuters) - The Bombay Stock Exchange Ltd. (BSE) has shortlisted London, Nasdaq, Deutsche Borse, New York and Singapore stock exchanges for the proposed sale of a 26 percent stake, the Business Standard newspaper reported on Saturday.

The newspaper, quoting sources, said that at its board meeting on Friday the exchange also decided to privately place some equity with domestic institutions, and banks which do not have their own broking outfits.

When contacted, BSE Managing Director and Chief Executive Officer Rajnikant Patel declined comment.

"There has been speculation on this ever since the plan for a stake sale was first mooted. It would not be right for me to make any comments at this point," he told Reuters.

The paper said that the exchange would be offering the stake to a maximum of three strategic investors.

Last month the Reserve Bank of India had said that foreign investment of up to 49 percent would be allowed in stock exchanges, depositories and clearing corporations. This would include a foreign direct investment of 26 percent and 23 percent sold to foreign institutional investors.

Markets regulator Securities and Exchange Board of India had said in November last year "that no person shall, directly or indirectly, acquire or hold more than five per cent in the paid up equity capital of a recognized stock exchange."

BSE has set itself a deadline of May 2007 to reduce the stake held by brokers by offering 26 percent to strategic investors and another 25 percent through an initial public offering.