SEBI allows listing of stock exchanges

SEBI allows listing of stock exchanges
Mumbai, Apr 2 (PTI) Clearing the decks for listing of stock exchanges, capital market regulator SEBI today said 51 per cent stake of bourses could be held with public.

This was decided after considering the much-debated Bimal Jalan Committee recommendations which had not favoured listing of stock exchanges.

The Board, however, in its meeting here accepted several other recommendations of Jalan Committee on 'Review of Ownership and Governance of Market Infrastructure Institutions (MIIs)'.

"The stock exchanges will have diversified ownership and no single investor will be allowed to hold more than 5 per cent except the stock exchange, depository, insurance company, banking company or public financial institution which may hold upto 15 per cent," Sebi said.

"51 per cent of the holding of the Stock Exchanges will be held by public," the market regulator said. The stock exchanges may be permitted to list when they put in place the appropriate mechanisms for tackling conflicts of interest, it said, adding, the stock exchanges will not be allowed to list on itself.

No stock exchange shall be permitted to list within 3 years from the date of approval by SEBI, it added. Prescribing conditions for listing, SEBI said, stock exchanges should have minimum networth of Rs 100 crore and the existing stock exchanges will be given 3 years to achieve the threshold capital base. In case of listing of other Market Infrastructure Institutions (MIIs) like Clearing Corporation (CC), the SEBI said the minimum networth for CC and the depository will be Rs 300 crore and Rs 100 crore respectively.

"All existing clearing corporations shall be mandated to "All existing clearing corporations shall be mandated to build up to the prescribed networth of Rs 300 crore over a period of 3 years from the date of notification or circular," it said.

In case of CCs, at least 51 per cent holding will be held by Stock Exchanges, it said. An exchange holding 51 per cent in a CC cannot hold more than 15 per cent in any other CC, it said, adding, to ensure diversified ownership for shareholders other than stock exchanges, the limit of 5 per cent (stock exchanges) and 15 per cent (FIs like insurance and Banks) shall apply as in the case of stock exchanges.

Any exchange currently holding more than 51 per cent stake in CC shall be given 3 years time to bring its holding to the prescribed limit, it said. The capital market regulator has also prescribed the criteria for de-recognition of any bourses not in operation.

A stock exchange without any trading on its platform or where the annual trading is less than Rs 1,000 crore may apply for voluntary de-recognition and exit, it said.

"If the stock exchange eligible for voluntary de-recognition is not able to achieve a turnover of Rs 1,000 crore on continuous basis or does not apply for voluntary de-recognition and exit within a period of 2 years from the date of notification, SEBI shall proceed with the compulsory de-recognition and exit of such stock exchange," it said. 


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