Stock Exchanges

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Securities and Exchange Board of India

Report of the Committee on 'Review of Ownership and Governance of Market Infrastructure Institutions'

November 2010

1

Securities and Exchange Board of India

Contents

CHAPTER

Page. No

Background ………………………………………………………... 3 1. 2. 3. 4. 5. Introduction ……………………………………………………… .. 6 Ownership norms ……………………………………………... 33

Governance norms ……………………………………………… .. 51 Measures for conflicts resolution ……………………………….. 57 Other issues ………………………………………………………. 61

Annexures A - Sample Questionnaire B - Number of responses received C - Shareholding restrictions in select countries D - Details of shareholding in select countries E - Abbreviations Endnotes

2

Securities and Exchange Board of India

Background
The Securities and Exchange Board of India constituted a Committee under the Chairmanship of Dr. Bimal Jalan, (Former Governor, Reserve Bank of India) to examine issues arising from the ownership and governance of Market Infrastructure Institutions (MIIs). The other members of the Committee were: a. Dr. K.P. Krishnan, Joint Secretary, Ministry of Finance Secretary (till June 30, 2010), Secretary, Economic Advisory Council to the Prime Minister of India (from July 1, 2010) b. Shri. Kishor Chaukar, Managing Director, Tata Industries c. Shri. Uday Kotak, Managing Director, Kotak Mahindra Bank Ltd d. Prof. G. Sethu, Officer on Special Duty, National Institute of Securities Markets e. Dr. K. M. Abraham, Whole Time Member, SEBI f. Shri J.N. Gupta, Executive Director, SEBI (Member Secretary).

Under the terms of reference, the Committee needed to review and make recommendations on the following issues: a. Ownership structure of stock exchanges and clearing corporations b. Board composition of stock exchanges and clearing corporations c. Listing and governance of stock exchanges and clearing corporations d. Balance between regulatory and business functions of stock exchanges and clearing corporations, with

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