Foreign SEs can buy up to 26% in BSE
Foreign stock exchanges like London Stock Exchange or New York Stock Exchange would now be able to pick up stake in Bombay Stock Exchange (BSE) and other Indian bourses.
The government has pegged the foreign direct investment limit in the exchanges at 26%. The guidelines in this regard are expected to be issued shortly.
Within the total foreign investment capped at 49%, FDI limit would be 26%, while 23% could be held by foreign institutional investors, sources told ET. The guidelines outlining the foreign investment policy of the government are expected to be issued by RBI and Sebi soon. However, the government is yet to firm up its views on foreign investment in commodity exchanges.
The guidelines will hasten the process of demutualisation of stock exchanges on the lines of NSE. These guidelines have capped the Indian public holding in the exchanges at 51%. Also, no single investor can hold more than 5% in the corporatised exchange to ensure that they do not secure any hold over the trading patterns in the exchange.
Now, with clarity emerging on the foreign investment front in the stock exchanges, foreign exchanges, which have been keen to pick up stake in Indian exchanges, would now be able to do so. The BSE has already lined up its plans for an initial public offer. Foreign investors would now be able to pick stake when the BSE or other regional exchanges list.
The move is expected to give a big boost to some of the regional stock exchanges who would be able to access not just foreign capital but also technical and technological knowhow from these foreign exchanges.
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