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

The Securities and Exchange Board of India (Sebi) has relaxed ownership norms for stock exchanges situated in International Finance Service Centre at GIFT city. The regulator has allowed corporates also to invest in the stock exchange at GIFT City. So far only financial institutions were allowed to hold stakes.

In a circular issued today amending Sebi (International Financial Services Centres) Guidelines, the regulator expanded the list of eligible shareholders and shareholding limits of stock exchanges desirous of operating in IFSC.

This will also apply to existing exchanges in GIFT City. For an anchor stock exchange, Indian or foreign, the minimum shareholding requirement is 51 per cent. The remaining share capital may be offered to any other person to the extent of 5 per cent by way of equity. They can be Indian companies or foreign. This was not permitted earlier.

BSE’s Indian International Exchange or INX has 9.9 per cent equity from ICICI bank and rest is held by BSE. Now BSE will be eligible to expand shareholding in INX. Another exchange active in GIFT City is NSE.

INX MD and CEO, V Balasubramaniam said, “Sebi today permitted to broadbase investors by allowing any Indian or Foreign investor to hold upto 5 per cent stake in the exchange. Earlier it was limited to Banks, Insurance Companies, Public Financial institutions with limit of 15 per cent and promoted by exchange with minimum stake of 51 percent. This will allow both Indian and Foreign – private equity players, investment funds, corporates, family offices etc to also invest in the exchange upto 5 percent.”

The cap for investment in Gift city stock exchange by an another stock exchange, insurance company, commodity derivatives exchange, public financial institution of Indian jurisdiction, and bilateral or multilateral financial institution approved by the Central Government will be 15 per cent.