Merger of st exch
The document discusses shareholding patterns in Indian stock exchanges and its implications. It notes that SEBI limits shareholding to 5% for most entities and 15% for banks and financial institutions. This leads to three categories of shareholders - shareholder directors, public and government nominees, and trading member directors. However, there is no clear process for electing trading member directors, allowing major shareholders to indirectly nominate them. This means shareholder directors may feel they have more control than they should. It also explains why some regional stock exchanges prefer converting to real estate over continuing operations due to this anomaly. Mergers between regional stock exchanges could help develop a financial sector across regions for investors, members and listed companies.
Merger of st exch
- 1. SHARE HOLDING PATTERN IN INDIAN STOCL EXCHANGES & ITS IMPLICATIONS In Indian Stock Exchanges SEBI has stipulated maximum 5% holding in the equity of Stock Exchanges, expect for Banks, Indian Financial Institutions, Other Stock Exchanges. These entities can hold equity up to 15% subject to SEBI approval. Thus there are three categories of share holders apart from Executive Director. A. Share holder Directors B. Public & Govt nominees C. Trading Member Directors IT’S IMPLICATIONS. As there is no clear clarification about election of Share holders & Trading Member Directors on the Board of Stock Exchanges & in the absence of the same usually Trading Members are indirect nominees of major share holders. Share holder Directors even though there share holding is restricted to 5% they feel they are the absolute owners. They forget they only represent share holders category, but the real control of regulating & running the Stock Exchanges vest with SEBI. This anomaly can be rectified if trading member Directors are elected only from trading members who are the share holders of the Stock exchanges & not by the other share holders. This is the main reason why most of the Regional Stock Exchanges instead of starting various types of Trading activities like Equity, Debt, CD etc, they are feeling comfortable in converting the Stock Exchanges into real-estate entities by fore going recognition from SEBI. Each of the Regional Stock Exchanges have over a period of time developed huge infrastructure of Intermediaries, Investors in their area of jurisdiction & Prime properties in the central locations. All these can be collectively used for the development of Huge Financial Village for the development of capital market. Merger of Regional Stock Exchanges for the sake of investors, Intermediaries & listed companies will go a long way in the development of capital market. SEBI & other related regulatory bodies should think in this direction Warm regards Krishna Lokkur