SEBI Eases Norms to Set Up Stock Exchanges

The Securities and Exchange Board of India (SEBI) has proposed creating a new liberalized framework for the entry of new market infrastructure institutions or intermediaries (MIIs).

Key Points

• SEBI has surfaced a discussion paper to review governance and ownership norms for facilitating new entrants to set up depositories or stock exchanges, otherwise known as market infrastructure institutions/intermediaries (MIIs).
• According to the major proposals, a resident promoter willing to set up an MII can hold up to 100% shareholding, which will be brought down to not more than 51% or 26% in 10 years.
• A foreign promoter from FATF (Financial Action Task Force) member jurisdictions willing to set up an MII can hold up to 49% shareholding, which can be brought down to not more than 26% or 15% in 10 years.
• Foreign entities or individuals other than FATF member jurisdictions can hold or acquire up to 10% in an MII.
• Any person other than the promoter may hold or acquire less than 25% shareholding.
• At least 50% of the ownership of the MII may be represented by entities or individuals with an experience of 5 years or more in the field of technology related to financial services or capital markets.

SEBI

SEBI is the securities and commodity market regulator in India. It was established in the year 1988 and got its statutory power in the year 1992 through SEBI Act, 1992. It is headquartered in Mumbai, Maharashtra.