India’s markets regulator on Thursday proposed allowing stock exchanges and depositories to invest in related businesses without seeking the regulator’s prior approval for each transaction.
The Securities and Exchange Board of India, or SEBI,proposed that these entities can make investments linked to core market functions without seeking its approval.
The regulator also plans to scrap prior approval requirements for exchanges and depositories to invest in SEBI-mandated initiatives.
The plan would also waive prior SEBI approval for investments through subsidiaries using internally generated funds and for investments in entities regulated by other financial regulators.
Such investments would need to be overseen by these institutions’ boards and subject to financial safeguards, according to the proposal.
The regulator has sought comments on its proposals till November 12.
Under current rules, even low-risk investments are subject to the same approval process as large strategic investments.
SEBI said that oversight should be aligned with actual risks and institutions should have greater operational flexibility.
The move could give exchanges and depositories – many of which are now publicly listed – greater flexibility to diversify revenue streams and pursue new business opportunities.
Reuters
