January 7, 2021
2 mins read

SEBI mulls setting up more exchanges

SEBI noted that the Indian securities market has witnessed dominance in trading and depository space, raising concerns on possibility of excessive concentration and institutional tardiness..reports Asian Lite News

The Securities and Exchange Board of India (SEBI) has proposed amendments in the regulations to ease the setting up of stock exchanges and depositories in the country.

In a statement, SEBI noted that the Indian securities market has witnessed dominance in trading and depository space, raising concerns on possibility of excessive concentration and institutional tardiness in quickly responding to the changing market dynamics which may have an adverse bearing on efficiency in trading, record-keeping, supervision and risk management practices.

It also said that several new fintech and techfin players have emerged in trading space in various jurisdictions, who are increasingly deploying these disruptive technologies and challenging the traditional functioning of stock exchanges and depositories.

“A need is, therefore, being felt to forge a competitive landscape in MIIs’ (Market Infrastructure Institutions) space by facilitating new players, who may like to challenge other MIIs in their already established domain, to set up MIIs or merger/ acquisition of the existing entities,” the SEBI statement said.

SEBI.



Noting that the current framework appears to restrain the entry of new players or acquisition of existing entities, the capital market regulator said: “It is, therefore, proposed to create a liberalised ownership framework by allowing higher shareholding at initial/inception stage with dilution over a period of time.”

As per the consultation paper, SEBI has proposed that resident promoter setting up the MII may hold up to 100 per cent shareholding which shall be brought down to not more than — either 51 per cent or 26 per cent — in 10 years.

“A foreign promoter (from FATF member jurisdictions) setting up the MII may hold up to 49 per cent shareholding (in terms of consolidated FDI Circular, 2020) which shall be brought down to not more than (either 26 per cent or 15 per cent) in 10 years,” it said.

Foreign individuals or entities from other than FATF member jurisdictions, may acquire or hold up to 10 per cent in an MII, SEBI proposed. Further, as per the consulation paper, any person, domestic or foreign, other than the promoter, may acquire or hold less than 25 per cent shareholding.

At least 50 per cent of ownership of the said exchange or depository, shall be represented by individuals or entities having experience (5 years or more) in areas of capital markets or technology related to financial services, it added.

Also read:RBI Points Towards Holding Inflation rate at 4%

Previous Story

‘NBFCs may witness growth revive in FY2022’

Next Story

SC stays SAT order taking down penalty

Latest from Business

India Inc Eyes Upswing

Private equity (PE) remained comparatively stable in Q2, clocking 357 deals worth $7.4 billion — the second-highest volume since Q4 2022. However, deal values dipped on a quarter-on-quarter basis due to the

Apple Appoints Sabih Khan as New COO

Khan will take over from Jeff Williams, who is stepping down from the role this month and will retire later this year…reports Asian Lite News Apple has announced that Sabih Khan, an

Microsoft Cuts Deep

The fresh job cuts come less than two months after Microsoft announced it was laying off more than 6,000 employees…reports Asian Lite News Microsoft is set to cut around 9,000 jobs —

Northeast Is Growth Engine

Scindia also provided updates on the government’s efforts to facilitate the entry of SpaceX’s Starlink service into India. “All due diligence from the Ministry’s side is complete Union Minister for Communications and
Go toTop