SEBI notifies norms for Listing of Stock Exchange

Securities and Exchange Board of India (SEBI) has notified new rules for ownership and governance of stock exchanges to encourage the establishing of new bourses and facilitate exchanges to get listed. The amendments were announced following the legal battle b/w the regulator and MCX Stock Exchange, which had earlier sought approval to launch an equity platform.

As per fresh norms:

  • The recognized stock exchange should have a minimum net worth of Rs 100 crore at all times and at least 51 % of stake has to be held by public
  • The ownership of a single investor is capped at 5% with an exemption for stock exchanges, depositories, insurance and banking companies and public financial institutions, which has been allowed to posses up to 15 %. 
  • The shareholders who possess stake in excess of the new limits would have to observe the new norms within a period to be decided by SEBI and such period could be of up to 3 years.
  • Stock exchanges are allowed to list on any recognized stock exchange other than itself and its associated stock exchanges, within 3 years of starting operations
  • Direct and indirect exposure to any stock exchange will be taken into account while calculating the preThe new scribed shareholding limit.
  • For a stock exchange that is not listed, an FII may acquire shares through transactions outside of a recognized stock exchange provided it is not an initial allotment of shares.
  • For listed bourses, the FIIs can transact through the exchange where the shares are listed.

The market regulator had earlier approved amendments to the Manner of Increasing and Maintaining Public Shareholding (MIMPS) in recognized stock exchanges.

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