The Securities and Exchange Board of India (SEBI) has proposed diversified ownership of equity clearing corporations (CCs) currently fully owned by the stock exchanges.
SEBI expects a broad-based and diversified ownership of clearing corporations would help strengthen their financial and operational independence and ensure they can operate primarily in the public interest, and not for commercial considerations.
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“CCs need to be, and need to be seen to be, truly independent of exchanges particularly in such interoperable segments, so that there is a level playing field across MIIs with no perception of any perverse conflict of interest,” SEBI said in a draft paper, inviting public comments by December 13.
The regulator has put forth two alternatives: 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% eventually.
Alternately, shareholders of exchanges can directly hold the entire equity, who would then be free to trade their shares in the CC. This would allow for a clean break of the CC from its parent exchange, in a manner that is fair to the existing shareholders of the parent exchange, SEBI said.
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SEBI has also suggested changes in the profit and dividend distribution of CCs. The regulator also seeks consolidation of CCs.
However, it has maintained that CCs will not be allowed to list on exchanges, maintaining the status quo on the current norm and restricting their listing.
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