Sebi revises shareholding limit for exchanges operating in IFSC

The decision has been taken based on the internal discussions and consultations with the stakeholders, the Securities and Exchange Board of India (Sebi) said in a circular.

Sebi revises shareholding limit for exchanges operating in IFSC

New Delhi: Markets regulator Sebi on Thursday revised the eligibility and shareholding limit for stock exchanges desirous of operating in international financial services centres to streamline operations at IFSCs.

The decision has been taken based on the internal discussions and consultations with the stakeholders, the Securities and Exchange Board of India (Sebi) said in a circular.

Under the framework, any Indian or foreign stock exchange may form a subsidiary to provide the services of bourse in an IFSC, wherein at least 51 one per cent of stake is held by the exchange and remaining share capital may be offered to any other person (whether Indian or of foreign jurisdiction).

Also, such person will not at any time, directly or indirectly, either individually or together with persons acting in concert (PAC), acquire or hold over 5 per cent in the exchange, subject to applicable laws, Sebi said.

It further said stock exchanges, depositories, banking company, insurance company, commodity derivatives exchange of Indian or foreign jurisdiction have been allowed to acquire 15 per cent stake in such bourse operating in an IFSC.

Among others, public financial institutions of Indian jurisdiction, and bilateral or multilateral financial institutions approved by the central government "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 a recognised stock exchange with prior approval of the board."

To give effect to this, Sebi has amended IFSC guidelines.

At present, a recognised bourse or any exchange of a foreign jurisdiction may form a subsidiary to provide the services of an exchange in an IFSC where at least 51 percent of paid up equity share capital is held by such exchange and remaining shares may be offered to any other recognised bourse, whether Indian or of foreign jurisdiction.

The country's only IFSC is in GIFT City near Ahmedabad in Gujarat.