JOIN USThe committee, headed by former RBI governor Bimal Jalan, had submitted its report to the market regulator Sebi in November last year.
The report recommended capping the stock exchanges’ profitability and barring them from getting listed to safeguard their role as a front-line regulatory body.
The proposals have been pending for about a year now and were deliberated here in a discussion amongst the senior Finance Ministry officials and the top executives of various stock exchanges, including NSE, BSE and MCX-SX.
Among others, Economic Affairs Secretary R Gopalan, Joint Secretary (Capital Markets) Thomas Mathew and Jalan expressed their views on the matter.
Sources said there was a general consensus about allowing the stock exchanges to get listed, improving the efficiency and transparency in their business and allowing greater competition in the business.
It was felt that listing of the exchanges could lead to better corporate governance practises at the bourses. The government officials are believed to have said the issue needs to be tackled carefully and a calibrated approach was required before allowing the listing.
Sources said many of the participants, including government officials and industry executives, suggested segregating the regulatory and business roles of the bourses before their listing.
It was discussed that either the regulatory role could be entirely vested with the market regulator Sebi, or the exchanges’ regulatory powers could be partly divided between Sebi and a new Self-Regulatory Organisation (SRO) formed with representation from various industry players.
However, there was no unanimity on the Jalan panel’s proposal for capping the profitability and for the shareholding pattern of the exchanges.
One of the options, proposed by an exchange, included allowing the exchanges to have an anchor investor with up to 26 per cent stake, while the other options were for having a more diversified shareholding and following the global models.
The senior government officials are believed to have opined that the issue of conflict of interest required to be tackled and one of the options could be hiving off the regulatory and surveillance functions of the exchanges to the outside agencies or SROs.