New Delhi: The Securities and Exchange Board of India (SEBI) on June 5 proposed consolidation of regional bourses to form a bigger entity 'Indonext' or a merger with either BSE (Bombay Stock Exchange) or NSE (National Stock Exchange), as part of the ongoing capital market reforms.

The proposal was placed by SEBI chairman G N Bajpai in a meeting with top officials of the Federation of Indian Stock Exchanges (FISE) in New Delhi.

"We proposed two options to the regional bourses -- one, combine and form 'Indonext' or two, merger with either BSE or NSE," Bajpai said at the sidelines of a press conference.

Earlier, the Kania committee on de-mutualisation of bourses suggested "Euronext" model for the regional stock exchanges.

FISE chairman Vijay Bhushan said its steering committee, comprising two representatives from all the regional bourses, would meet on June 14 in Mumbai to decide the future roadmap.

The proposal comes in the wake of the declining or virtually zero-trading session in most regional bourses in the last few years.

Moreover, the profitability of the bourses have come down as earnings from listing fees declined sharply after many of the companies decided to delist their shares from the regional exchanges.

The proposal of consolidation also comes in the wake of the de-mutualisation of bourses as envisaged by the regulator after the passage of the Securities Contract Regulation Act.

Government has also amended the SEBI Act to give the regulators more powers. Pursuant to this, SEBI has stepped up efforts to penalise erring companies.

"We have already imposed penalties of Rs one lakh a day or Rs one crore to many companies," Bajpai said.

PTI