The Securities and Exchange Board of India (SEBI), on October 14, 2024, issued a notification regarding the Monitoring Shareholding of Market Infrastructure Institutions (MIIs).
framework for monitoring and ensuring compliance with shareholding norms for Market Infrastructure Institutions (MIIs), including both listed and unlisted stock exchanges and depositories. The MIIs must appoint a designated depository (DD) to monitor shareholding limits as per the SECC Regulations, 2018, and D&P Regulations, 2018. Additionally, MIIs are required to disclose their shareholding patterns quarterly on their websites and adhere to various shareholding thresholds, including the 5%, 15%, and 49% limits for persons resident outside India.
For stock exchanges, the DD must ensure that the aggregate shareholding of Trading Members (TMs), their associates, and agents does not exceed 49% of the paid-up equity capital. It will monitor the shareholding daily and alert TMs if their holdings reach the cautionary limit of 45%. MIIs must ensure that shareholders are fit and proper at all times and inform SEBI if any shareholders fail to meet this criterion. Non-compliance, including breaches of shareholding limits, will result in freezing of voting rights and corporate benefits for the excess shares.
This circular rescinds previous SEBI circulars and letters and will take effect 90 days from its issuance. MIIs are required to update their systems, bylaws, and regulations to ensure compliance with these provisions. The circular is issued under the powers conferred by the SEBI Act, 1992, and aims to protect investor interests and promote the development and regulation of the securities market.
[Notification No. SEBI/HO/MRD/MRD-PoD-3/P/CIR/2024/139]
