Sebi broadbases investors, relaxes ownership norms for bourses in GIFT City

Regulator expands shareholding limits of stock exchanges desirous of operating in IFSC

The Securities and Exchange Board of India (Sebi) has relaxed ownership norms for stock exchanges situated in the International Financial Services Centre (IFSC) at GIFT City. The regulator has given green signal to corporates to invest in the stock exchange. So far, only financial institutions were allowed to hold stake.

The regulator expanded the list of eligible shareholders as well as shareholding limits for stock exchanges that wish to operate at IFSC.

This decision will also apply to the existing exchanges at GIFT City. For anchor stock exchanges, the minimum shareholding requirement (whether Indian or foreign) is 51 per cent. The remaining share capital may be offered to any other person, regardless of nationality, but with a cap of 5 per cent equity. This was not permitted earlier.

ICICI Bank holds 9.9 per cent equity in the BSE’s Indian International Exchange (INX). The rest is held by the BSE. With this amendment, the BSE will be eligible to expand shareholding in the INX. The NSE also operates at GIFT City. 

INX's MD and CEO V Balasubramaniam said:  “Sebi has permitted broadening the range of investors by allowing any Indian or foreign investor to hold up to 5 per cent stake in the exchange. Earlier, it was limited to banks, insurance companies, and public financial institutions with a limit of 15 per cent, and promoted by the exchange with a minimum stake of 51 per cent. This decision will allow both Indian and foreign private equity players, investment funds, corporates, family offices etc. to invest in the exchange, up to 5 per cent.”

The investment cap in the GIFT City stock exchange by another stock exchange, insurance company, commodity derivatives exchange, public financial institution of Indian jurisdiction, and a bilateral or multilateral financial institution approved by the central government will be 15 per cent.