Context:

In the latest move, SEBI proposed a new framework for ownership of Market Infrastructure Institutions (MIIs) to facilitate new entrants to set up stock exchanges and depositories.

MIIs

• Intermediaries / Market Infrastructure Institutions:
  • Recognized Intermediaries
  • Processing Application Status
  • Stock Exchanges
  • Application Formats and Fees
  • Clearing Corporations
  • Depositories
  • Entities Permitted to Send Stock Tips using Bulk SMS
• These institutions are systemically important institutions whose failure could lead to “bigger cataclysmic collapses” bringing down the economy.

Present framework

The present framework caps the ownership of MIIs at a lower shareholding limit, which is not more than 5 percent for individuals and institutions (domestic or foreign) in general, and permits only up to 15 percent ownership stake by select category of institutions.