Sebi may let banks hold 26% in bourses

New Delhi, June 11 | Updated: Jun 12 2006, 05:30am hrs
The Securities and Exchange Board of India (Sebi), in its final guideline on demutualisation of the stock exchanges, is likely to allow strategic partners including multi-lateral agencies and banks to enjoy a maximum holding of 26%. It may also allow 25% to be privately placed to others or go ahead with an initial public offer.

Earlier, a committee had been appointed by the Sebi to study the demutualisation strategy for the regional stock exchanges. The RSEs like the Delhi Stock Exchange had underlined the need to go ahead with the demutualisation plan through incorporation of strategic investors in their proposals for demutualisation.

We have been in favour of inviting strategic partners for demutualisation as practically no trading operations take place at the regional stock exchanges and therefore an IPO would have not been a major success, sources said, adding that the move would also protect investors interest.

Sources also said several stock exchanges from other countries have also evinced interest in picking up stake in the exchanges here. The RSEs have to be revived before going in for an IPO, they said.

The government wanted to go ahead with demutualisation in a bid to corporatise the stock exchanges. The move will segregate ownership, management and trading rights from each other.

Sources said the guidelines are expected in the next few weeks. The SEs will then operate as for-profit entities. The government has also amended the Securities Contract (Regulations) Act to pave the way for corporatisation and demutualisation of SEs.