The newly constituted panel under Renuka Kumar, joint-secretary, ministry of corporate affairs, which is looking into the Bimal Jalan Committee report on ownership is likely to submit its report to the market regulator Securities and Exchange Board of India (Sebi) within two months. It is of the view that the structure of stock exchanges should be on the lines of other financial sector operators including banks.
The panel has favoured segregation of dual roles currently played by stock exchanges, underlining the need to separate regulatory functions from the commercial purpose is any bourse decides to visit the market.
It is also of the view that the current ownership restriction on exchanges of a 5% cap on a single entity is an aberration not only from wide international practices but also when compared to what other regulators in India such as the Reserve Bank of India (RBI). The panel could recommend an ownership structure in line with other financial sector operators including the banks.
While the RBI allows promoters of banks to hold a maximum of 40% stake and initial holding of more than 40%, IRDA allows maximum permissible stake of 26% and initial holding of more than 26% and FMC allows maximum of 26% and initial holding of more than 26%.
In comparison, promoters of exchanges face more restrictive norms as barring a few entities such as banks and financial institutions who are allowed to hold 15% stake, no other promoter is allowed to hold more than 5% even in initial stages and the least grace period for diluting their stake.