The government is unsure of implementing suggestions of the Bimal Jalan committee on ownership of stock exchanges.
The committee that was set up by the Securities and Exchange Board of India (Sebi) to review the structure of market infrastructure institutions (MIIs) such as stock exchanges, clearing corporations and depositories, has proposed that such entities be prohibited from getting listed.
Sebi formed the seven-member committee in February, chaired by former governor of the Reserve Bank of India, Bimal Jalan, to review the ownership and governance norms of MIIs and suggest changes. The panel says such entities should not become a vehicle for attracting speculative investments.
An official source said that if the report is implemented, it could well promote monopoly. “The report seems to be one sided and may promote monopoly, which could prove to be a deterrent for smaller stock exchanges,” the source said.
The Committee has proposed to put cap on the profits of MIIs that could make the incoming investments null and void.
Market observers feel the cap is against the natural process of investment. “This proposal, if implemented, could chase away potential investors as why would investor put in money in a venture where the profits have a ceiling,” said a senior executive of a stock exchange who did not wish to be identified.
The panel supported the concept of an anchor investor for stock exchanges.