Sebi Proposes Major Overhaul to Diversify Clearing Corporations' Ownership

The Securities and Exchange Board of India (Sebi) has proposed diversifying and broadening the ownership of clearing corporations, currently owned by stock exchanges. The plan aims to ensure fairness, minimize disruption, and maintain CCs as profit-making public utilities. Sebi has invited public comments by December 13.

The Securities and Exchange Board of India (Sebi) on Friday introduced a proposal to diversify and expand the ownership of clearing corporations, which are fully-owned subsidiaries of stock exchanges. The current Sebi regulations restrict clearing corporations from public listing, only allowing their parent stock exchanges to do so.

Sebi emphasized the importance of ensuring that any ownership transition of clearing corporations is equitable for all stakeholders and minimizes disruption to the capital markets. The proposal includes a method where a 49% stake in a clearing corporation might be distributed to existing shareholders and the remaining 51% would initially stay with the parent stock exchange.

Over five years, the parent stock exchange would need to reduce its holding to 15% or less. Alternatively, a full transfer of clearing corporation shares to existing exchange shareholders could occur, allowing trades to take place independently. Public comments on these proposals are being invited by Sebi until December 13.

(With inputs from agencies.)