Accepting most of the recommendations of the Bimal Jalan committee, the Securities and Exchange Board of India (SEBI) in its board meeting on Monday said that stock exchanges wishing to list should have minimum networth of Rs. 100 crore and that existing bourses will be given 3 years to achieve this net worth.
The Jalan committee was formed by the market regulator to review ownership and governance norms for market infrastructure institutions (MIIs) such as stock exchanges, clearing corporations and depositories. The committee, which had not favoured listing of stock exchanges, submitted its report to SEBI in November 2010.
In order to ensure diverse ownership, SEBI said that exchanges will have to offload 51% stake with no single investor holding more than 5%, adding that such bourses cannot list on their own exchange.
“No single investor will be allowed to hold more than 5% except the stock exchange, depository, insurance company, banking company or public financial institution which may hold up to 15%,” added SEBI.
“It (new norms) should have a significant impact on the way the MII industry is structured,” said a senior official of the National Stock Exchange.
On the issue of exit of non-operational stock exchanges, the regulator has said that stock exchanges having an annual trading turnover of less than Rs. 1,000 crore will have to apply for voluntary de-recognition and exit.
If the stock exchange eligible for voluntary de-recognition is not able to achieve a turnover of Rs. 1000 crore on continuous basis or does not apply for voluntary de-recognition and exit within a period of two years from the date of notification, SEBI shall proceed with the compulsory de-recognition and exit of such stock exchange.
In case of clearing corporations at least 51% holding will be held by bourses. However, no single exchange will hold more than 51% in any clearing corporation.