Markets regulator Sebi today allowed foreign investors to own up to 15 per cent stake in domestic stock and commodity exchanges, a move that is expected to help attract more overseas funds.
Currently, foreign entities can hold only up to 5 per cent stake in an exchange.
Sebi’s board, which met here today, cleared amending regulations to “increase the limit of shareholding of foreign institutional investors mentioned therein in Indian stock exchanges from 5 per cent to 15 per cent”.
Besides, foreign portfolio investors would be allowed to acquire shares of unlisted stock exchanges through transactions outside of recognised stock exchange, including the initial allotment.
Already, a number of overseas investors have invested in leading exchanges NSE and BSE and the latest decision would help them enhance their exposure to the Indian markets.
In July, the Cabinet had cleared the proposal to increase foreign shareholding limit to 15 per cent in exchanges.
Finance Minister Arun Jaitley had made an announcement in this regard in the 2016 Budget speech.
“Investment limit for foreign entities in Indian stock exchanges will be enhanced from 5 per cent to 15 per cent 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.