A committee appointed by the Securities and Exchange Board of India (SEBI), has submitted a report reviewing the existing norms regarding the ownership and governance of market infrastructure institutions (MIIs).
The report discusses the existing structures of MIIs such as stock exchanges, clearing corporations and depositories, while examining the impact of MIIs on the progress of the Indian financial market. In addition, it recommends changes to ensure further growth and proper regulation of MIIs.
The committee observed the following:
Ownership norms
The current MII structure ensures that a single entity cannot gain control over a stock exchange in order to prevent any biased decision making. The committee proposed the idea of an “anchor institutional investor” to enable certain institutions to hold a greater stake in a stock exchange.
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The legislative and regulatory update is compiled by Nishith Desai Associates, a Mumbai-based law firm. The authors can be contacted at nishith@nishithdesai.com. Readers should not act on the basis of this information without seeking professional legal advice.
