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SEBI has put the ball in the government’s court on implementing new rules proposed by a market regulator-appointed panel on how stock exchanges should be owned and run.
Sources said that SEBI is awaiting the final word from the finance ministry on the issue before taking up the case at its board for implementation of the new rules.
‘Review of ownership and governance of Market Infrastructure Institutions (MIIs)’ has been listed as one of the priority areas by SEBI among the steps it aims to take during the current fiscal towards “administering, supervising and inspecting” of these entities.
The implementation of the recommendations made by the panel, headed by former RBI Governor Dr Bimal Jalan and comprising industry experts such as eminent banker Mr Uday Kotak, in this regard has been pending for many months now.
Interestingly, Kotak Mahindra Capital, part of Kotak group, has been advisor to BSE in the bourse’s corporatisation and demutualisation plan that included a possible listing of the exchange.
Kotak Group also promotes ACE Derivatives and Commodity Exchange, where it plans to dilute 11 per cent stake by August this year and will consider listing it by 2014-15.
ACE Derivatives’ CEO Mr Dilip Bhatia said last week that Kotak Group was looking for strategic investors to dilute 11 per cent stake from its existing 51 per cent holding.
Mr Bhatia further said that Kotak Group would have to bring down its stake to 26 per cent by 2014-15 and the exchange might plan an IPO at that time.
Besides Kotak, the Jalan panel comprised of SEBI’s whole- time member Mr K M Abraham, PM’s Economic Advisory Committee Secretary Mr K P Krishnan, Tata Industries’ MD Mr Kishore Chaukar and National Institute of Securities Markets’ Mr G Sethu.
The panel suggested sweeping changes in the way stock exchanges are owned and function and strongly recommended capping their profitability and not allowing them to get listed to safeguard their front-line regulatory role.
The proposals generated intense debate and opposition has been raised to various proposals including non-listing of bourses and cap on profitability, terming them as measures that would push the investors away.
SEBI had set up in January 2010 this committee for review of ownership and governance norms for market infrastructure institutions such as stock exchanges and the panel submitted its report to the regulator in November last year.
SEBI had made the recommendations public on November 23, 2010 and invited public comments on the same till December 31.
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