Foreign holding in bourses: Sebi notifies rules


Regulator Sebi notified rules allowing foreign investors to own up to 15 percent stake in an exchange, a move that is expected to help attract more overseas funds.

Currently, foreign entities can hold only up to 5 percent in an exchange.

Sebi has amended regulations to increase the limit of shareholding of foreign entities like stock exchange, depository, banking and insurance company and commodity derivatives exchange in Indian stock exchanges to 15 percent, from 5 percent.

Now, these entities “may acquire or hold, either directly or indirectly, either individually or together with persons acting in concert, up to 15 percent of the paid-up equity share capital of a recognised stock exchange”, Sebi said in a notification dated January 12.

The move comes after Sebi board in September approved a proposal to this effect.

Already, a number of overseas investors have invested in leading exchanges NSE and BSE and the latest decision will help them enhance their exposure to the Indian market.

In July, the Cabinet had cleared the proposal to increase foreign shareholding limit to 15 percent in exchanges.

Finance Minister Arun Jaitley had made an announcement in this regard in his 2016 Budget speech.

“Investment limit for foreign entities in Indian stock exchanges will be enhanced from 5 percent to 15 percent on par with domestic institutions. This will enhance global competitiveness of Indian stock exchanges and accelerate adoption of best-in-class technology and global market practices,” he had said.