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Nearly four years after it acquired a majority stake in Computer Age Management Services (CAMS), it has now come to light that the NSE may not have sought prior permission from SEBI for the deal.
After Ajay Tyagi took over as SEBI Chairman this year, the regulator and members of a committee formed by it sought details of regulatory approvals for the deal. But it has now emerged that no formal approval was sought, a source close to the development told BusinessLine .
Some of the recent agreements and deals done by the BSE too are being looked into, the source said.
NSE in 2013 acquired a 45 per cent stake in CAMS, which is involved in transaction processing and customer care services to mutual funds and a service partner to insurance companies, banks, NBFCs and private equity funds.
NSE’s deal raised eyebrows, as earlier SEBI, under its former chairman CB Bhave, had informally expressed its reservations when BSE tried to acquire CAMS citing conflict of interest. But NSE went ahead with the deal when UK Sinha replaced Bhave as SEBI chairman.
SEBI now wants to know if the deal was formally apprised by it, the source said. The worry is that key market infrastructure companies were moving into businesses operating in a regulatory vacuum, an expert said.
Outside deals
Stock exchanges and other key market infrastructure institutions (MIIs) are trying to move into other businesses that do not fal under SEBI’s jurisdiction. Apart from CAMS, NSE holds stake in NSDL e-Governance that is involved in GSTN and Aadhaar-related work that is outside the capital market segment. For this purpose, NSDL e-Governance demerged from its parent NSDL, which is a share depository.
BSE has tied up with Switzerland’s algorithmic data analysis firm Sentifi to report social media updates and is also betting big on selling insurance policies.
NSE did not reply to an email query sent to it on the matter by BusinessLine last week. But it has been reported that NSE has been looking for a buyer for its stake in CAMS.
BSE said that a SEBI expert committee headed by R Gandhi, which is reviewing regulations pertaining to MIIs, had sought information, but no specific separate questions were raised with respect to BSE’s move to venture into other businesses that are not related to its core activity.
BSE’s response
“BSE has always followed extant regulations with respect to its operations. Wherever necessary and required, BSE has taken prior approval of SEBI, including the insurance distribution business.
“As regards Sentifi, it is simply a vendor which provides some of the news, social media analysis to BSE which is posted on the BSE website. Engaging with vendors would not require prior approval of SEBI, as per the extant regulations,” said the stock exchange.
A questionnaire sent to SEBI on the matter went unanswered.
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