SEBI to raise the cap on shareholding in stock exchanges

Market regulator SEBI has proposed to raise the cap on shareholding pattern from currently 5% to 15% in the stock exchanges. The move is likely to limit such a privilege to the individual investors like bourses, depositories, clearing members and insurance companies. However, any other shareholder would continue to hold up to 5% in the equity of the stock exchange.

The regulator mooted the proposal after receiving submission from the existing shareholders of NSE and Over The Counter Exchange of India regarding difficulties in bringing down their equity stake to the present cap of 5%.

After, demutualization and corporatisation of the stock exchanges, the government has proposed to allow foreign investment up to 49% in the stock exchange with a cap of 26% for FDI and 23% for FIIs. However, no individual member can hold more than 5% at present.