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Sebi proposes more diversified ownership of equity clearing corporations

A clearing corporation is responsible for the confirmation, settlement and delivery of trades

SEBI

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Reuters MUMBAI

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India markets regulator is proposing more diversified ownership of equity clearing corporations, which are currently fully owned by the country's exchanges. 
A clearing corporation is responsible for the confirmation, settlement and delivery of trades. 
Broad-basing and diversifying the ownership of clearing corporations would help strengthen their financial and operational independence and ensure they can operate primarily in the public interest, the Securities and Exchange Board of India (SEBI) said in a consultation paper on Friday. 
To achieve diversification, the SEBI has proposed and sought public comments on two options. 
The first option is to allow existing shareholders of exchanges to own 49% of the clearing corporation directly, leaving the parent exchange to hold 51% initially. 
 
The exchange can then be required to bring down its holding to 15% over time, the SEBI proposed. 
Alternately, shareholders of exchanges can directly hold the entire equity of the clearing corporation subject to a change in existing regulations. 
Present regulations require stock exchanges to own at least 51% of clearing corporations. 
The SEBI said that clearing corporations should continue to function as "profit making" entities and evolve a "reasonable" fee model that allows them to be self-sustaining. 
Clearing corporations will continue to be prohibited from listing, the regulator said. 
The SEBI has sought comments on the proposals by Dec. 13 before finalising the rules.
 

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First Published: Nov 22 2024 | 7:39 PM IST

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