LSE and ISE to set up new company to promote demutualisation

Lahore Stock Exchange (LSE) and Islamabad Stock Exchange (ISE) have agreed to set up a new company to promote demutualisation and integration of stock exchanges in the country. It is learnt that rumours of LSE and ISE merger have proved wrong and the two exchanges have decided to set up another company, which could compete with the other premier exchange of the country. LSE and ISE will not be directly merged and they would operate under the umbrella of a new company ie National Stock Exchange.
"A separate company will be formed and both exchanges will be merged into a single company", sources said.
This step seems to be taken in the wake of refusal of Karachi Stock Exchange (KSE), which seems to be not in favour of merger of three stock exchanges.
Sources told Business Recorder that the strategy of ISE and LSE is in accordance with the second option proposed by the experts committee on demutualisation and integration.
The decision of LSE and ISE seems to convey an indication to SECP to create a new stock exchange in which LSE and ISE could act as sponsors, without participation of KSE, sources added.
Meanwhile, a joint meeting of LSE and ISE Committees on Demutualisation and Integration was held on March 5, 2005, in ISE Board Room.
The Members deliberated the issues involved in the demutualisation and Integration in detail. The Report of the Experts Committee also remained under discussion at length.
Both Committees agreed on the need of a new ''Fully Integrated and Demutualised Stock Exchange'' (FIDE), as recommended by the Experts Committee formed by the SECP. The Committees decided to support the creation of a unified Stock Exchange through merger and integration of LSE, ISE or/and any other Exchange into FIDE to be established with the joint sponsorship of LSE and ISE.
The Committees also decided that the Chairmen of the two stock exchanges would advance negotiations with SECP to implement the said proposal and to seek the support of SECP on this initiative.
The Committees further recommended to put this proposal with the respective boards and the general bodies to fulfil the statutory requirements. In the end, a joint declaration was also signed between the two Exchanges in this regard.