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'Sebi may increase shareholding limit in exchanges and clearing corporations'

The regulator may also come out with new regulations restricting the tenures of managing directors and chief executive officers of exchanges and clearing corporations to just one term, said a source. 

December 17, 2020 / 16:38 IST
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The Securities and Exchange Board of India is planning to revamp Securities Exchange and Clearing Corporation (SECC) regulations. With these proposed amendments, Sebi plans to raise the shareholding limit in exchanges and clearing corporations.

Speaking to Moneycontrol, a source close to the development said: “Sebi is working on a long-pending demand by exchanges and clearing corporations to increase individual and financial institution shareholding stake limits in exchanges and clearing corporations.”

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The source added: “The regulator is considering increasing financial institutions’ shareholding stake from 15 percent to 26 percent in exchanges and clearing corporations, at par with banking regulations. The Reserve Bank of India has proposed a 26 percent shareholding limit in banks.”

Amit Tandon, Managing Director of proxy advisory firm IIAS, said: “The issue regarding ownership is similar to that in banks.  Here, too, you want ownership to be widely dispersed, with no ‘controlling’ shareholder.  Like RBI is thinking about increasing the limit to 26 percent, Sebi too needs to do so".