Sebi issues framework for exchanges, clearing corp at IFSC

A domestic or foreign bourse can set up an exchange in the IFSC with at least 51 per cent stake while the remaining can be held by other exchanges or banks, among others, with an individual cap of 15 per cent.
The Securities and Exchange Board of India (Sebi) said insurers, commodity derivative exchanges, public financial institutions of Indian jurisdiction are also eligible to hold the remaining shares.
In a circular, the regulator said any one of these entities may "acquire or hold, either directly or indirectly, either individually or together with persons acting in concert, up to 15 per cent of the paid-up equity share capital of such stock exchange (new venture)".

Under the IFSC regime, any recognised domestic or foreign stock exchange can set up a subsidiary in the international financial services centre (IFSC) to offer services, provided they hold at least 51 per cent stake in the venture.
The same rules will be applicable to clearing corporations keen on operating at the IFSC.
Sebi said any India registered depository may set up a branch -- IFSC Depository Services -- at the IFSC after prior approval of the markets regulator.

"Such Indian depository shall be required to ringfence its domestic operations, financially, operationally and technologically, from its operations at the IFSC," Sebi said.

For foreign depositories seeking to operate at the IFSC, the regulator said such entities can form a subsidiary to provide the services at the IFSC where at least 51 per cent should be held by such depository and the remaining shares may be offered to any other registered depository or stock bourse or clearing corporation, whether Indian or of foreign jurisdiction.
"Any Sebi registered intermediary (except trading member or clearing member) or its international associates in collaboration with such Sebi registered intermediary may provide financial services relating to the securities market, at the IFSC, without forming a separate company, subject to the prior approval of the board," Sebi said.

The regulator also said the parent depository or stock exchange or clearing corporation will be responsible for the governance of these subsidiaries at all times.