Skip to main content

Sebi may consider exchanges’ foray into unrelated businesses

By
Sebi may consider exchanges’ foray into unrelated businesses
A Securities and Exchange Board of India (Sebi) panel headed by R Gandhi, former deputy governor of the Reserve Bank of India, will consider allowing Indian stock exchanges to enter into unrelated businesses, said two persons close to the development. At present, stock exchanges are allowed to provide only trading platform and promote clearing corporation and depositories.
“Exchanges want more sources of income. Now, their revenue is from regulatory function such as listing fees etc.,” said one of the persons mentioned above.“Stock exchanges won’t be able to attract investments from investors if it’s not into other businesses. So, they want to carry out unrelated activity through subsidiaries.”
On October 16, Sebi constituted a committee under Gandhi to review the norms for market infrastructure institutions such as stock exchanges, depositories and clearing corporations.Stock exchanges recently met the panel and sought for change in rules, the two persons said.
Exchanges need Sebi permission to venture into businesses outside its core activity. In the past, when exchanges wanted to do registrar business, they were not allowed.
Globally, exchanges are allowed to venture into new businesses and are not so tightly regulated like in India. They are regulated only for the purpose of the trading platform, while Chinese walls are maintained between other businesses.
“Globally, exchanges store data and disseminate them for research and commercial activity for a fee,” said the second person quoted above.
Sandeep Parekh, founder of Finsec Law Advisors, said: “So long as the other businesses don’t pollute the main exchange activity, it should be fine. Similar principles may not be applied to clearing corporations as it is more sensitive.”
The slew of recommendations by the Bimal Jalan committee on stock exchange reforms in 2012 had asked the regulator to conduct a review of the rules for bourses every five years.
“It’s a totally unexplored area,” said a senior regulatory official familiar with the development. This request was made to the Bimal Jalan committee but then they felt it had to be considered in due time, he said.
A top exchange official said it needed clarity on the definition of what is related and unrelated business. Market participants said exchanges could propose venturing into data analytics business though their usage should be allowed only in select fields.
“Data analytics if it is only for the purpose of securities market should be allowed. But, it should not be sold to consumer companies,” said JN Gupta, a former Sebi executive director and a member of the Jalan committee.
“Exchanges are getting data because of law. It is a regulatory requirement hence it shouldn’t be allowed to be used by them for their commercial purpose or any other purpose unless approval is obtained from
The Economic Times, New Delhi, 4th December 2017

Comments

Post a Comment

Popular posts from this blog

Credit card spending growth declines on RBI gaze, stress build-up

By
  Credit card spends have further slowed down to 16.6 per cent in the current financial year (FY25), following the Reserve Bank of India’s tightening of unsecured lending norms and rising delinquencies, and increased stress in the portfolio.Typically, during the festival season (September–December), credit card spends peak as several credit card-issuing banks offer discounts and cashbacks on e-commerce and other platforms. This is a reversal of trend in the past three financial years stretching to FY21 due to RBI’s restrictions.In the previous financial year (FY24), credit card spends rose by 27.8 per cent, but were low compared to FY23 which surged by 47.5 per cent. In FY22, the spending increased 54.1 per cent, according to data compiled by Macquarie Research.ICICI Bank recorded 4.4 per cent gross credit losses in its FY24 credit card portfolio as against 3.2 per cent year-on-year. SBI Cards’ credit losses in the segment stood at 7.4 per cent in FY24 and 6.2 per cent in FY23, the...
Post a Comment
Read more

SFBs should be vigilant, proactive to mitigate risks: RBI deputy guv

By
  The Reserve Bank of India’s Deputy Governor Swaminathan J on Friday instructed the directors of small finance banks (SFBs) to be vigilant and proactive in identifying emerging risks in the sector.Speaking at a conference for directors on the boards of SFBs, Swaminathan highlighted the role of governance in guiding SFBs towards sustainable growth with stability. He also emphasised the importance of sustainable business models.Additionally, he highlighted the need for strengthening cybersecurity to protect the entities against digital threats and urged for a stronger focus on financial inclusion, customer service, and grievance redressal to ensure a broader reach of banking services.Executive Directors S C Murmu, Rohit Jain, and R L K Rao, along with other senior officials representing the Supervision, Regulation, and Enforcement Departments of the RBI, also participated in the conference.   -  Business Standard  30 th  September, 2024
Post a Comment
Read more

Brigade Hotel Ventures files draft papers with Sebi for Rs 900 crore IPO

By
  Brigade Hotel Ventures Ltd, owner and developer of hotels in South India, has filed draft papers with capital markets regulator Sebi to raise Rs 900 crore through an initial public offering (IPO).The proposed IPO is entirely a fresh issue of equity shares with no Offer-for-Sale (OFS) component, according to the draft red herring prospectus (DRHP).Proceeds from the issue to the tune of Rs 481 crore will go towards payment of debt, Rs 412 crore will be allocated to the company and Rs 69 crore to its material subsidiary, SRP Prosperita Hotel Ventures Ltd.Additionally, Rs 107.52 crore will be used to purchase an undivided share of land from the Promoter, BEL, and the remaining funds will support acquisitions, other strategic initiatives, and general corporate purposes.The company may raise up to Rs 180 crore through a Pre-IPO Placement.   If the placement is undertaken, the issue size will be reduced.Brigade Hotel Ventures Ltd is a wholly-owned subsidiary of Brigade Enterprises ...
Post a Comment
Read more