Sebi tweaks ownership rules for bourses; defines associates

To make it easier for stock exchanges to get listed, markets regulator Sebi today tweaked its regulations for ownership of stock exchanges with a change in the definition of 'associates'.
The new listing norms for the exchanges require that the bourses would need to take steps for maintaining public shareholding of 51 per cent at all times and ensuring that holding of trading members, associates or agents does not exceed 49 per cent.
Tweaking the definition of 'associates', Sebi has now notified a fresh amendment in the norms following which the associate of an entity would be the one holding more than 15 per cent.

Earlier, an entity holding "15 per cent, or more shares" was defined as an associate.
Besides, the earlier definition also classified an entity as associate, "whose director or partner is also a director of the first person or its subsidiary or holding company, or partner of the first person, as the case may be". This definition has altogether been dropped now.
While a holding company or a subsidiary would continue to be classified as an associate, this classification would no longer apply to "a company under the same management as of the first person".
At the same time, Sebi has added one clause in its definition for 'associate', under which it will have powers to decide on such classification in cases where the regulator "is of the view that a person shall be considered as an associate based on the facts and factors including the extent of control, independence, conflict of interest".