**Summary:**
This circular, issued by the Securities and Exchange Board of India (SEBI) on August 7, 2020, pertains to amendments to the SEBI International Financial Services Centres (IFSC) Guidelines, 2015, specifically concerning the eligibility and shareholding limits for clearing corporations operating in IFSC.
The amendment to clause 4.2 of the SEBI IFSC Guidelines, 2015, stipulates that any Indian recognized stock exchange or clearing corporation, or any recognized stock exchange or clearing corporation of a foreign jurisdiction, must form a subsidiary to provide clearing corporation services in IFSC, holding at least 51% of the paid-up equity share capital.
The remaining share capital can be acquired or held by any other person, whether Indian or foreign, with a restriction that no such person shall, individually or in concert, hold more than 5% of the paid-up equity share capital. However, exemptions are provided, allowing specific entities to acquire or hold up to 15% of the paid-up equity share capital. These entities include:
* Any other stock exchange
* A clearing corporation
* A depository
* A banking company
* An insurance company (whether Indian or foreign)
* A public financial institution of Indian jurisdiction
* A foreign commodity derivatives exchange
* A bilateral or multilateral financial institution approved by the Central Government
The circular mandates compliance with Regulations 19, 19A, and 20 of the Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) Regulations, 2018.
This circular is issued under Section 11(1) of the Securities and Exchange Board of India Act, 1992, to protect investor interests, promote development, and regulate the securities market. The circular is available on the SEBI website (www.sebi.gov.in). For further information, contact Amit Tandon, General Manager, Market Regulation Department, at amitt@sebi.gov.in.
Key Entities Referenced
Securities and Exchange Board of India: Regulatory body for securities market in India.
International Financial Services Centres: Special economic zones in India that provide financial services to non-residents and residents, in foreign currency.
SEBI IFSC Guidelines, 2015: Guidelines issued by SEBI regarding the operation of clearing corporations in International Financial Services Centres.
Securities and Exchange Board of India Act, 1992: Act of the Parliament of India that established the Securities and Exchange Board of India (SEBI).
Clearing Corporations: Organizations that facilitate the clearing and settlement of securities transactions.
Securities Contracts Regulation Stock Exchanges and Clearing Corporations Regulations, 2018: Regulations pertaining to stock exchanges and clearing corporations.
SEBI Circular SEBIHOCIRP201785: A circular issued by SEBI on July 27, 2017.
Indian jurisdiction: Refers to entities or laws within the legal and regulatory framework of India.
भारतीय प्रततभतू त और तितिमय बोर्ड
Securities and Exchange Board of India
CIRCULAR
SEBI/HO/MRD2/DCAP/CIR/P/2020/149 August 07, 2020
All recognized Clearing Corporations in International Financial Services Centres (IFSC)
Dear Sir / Madam,
Subject: Securities and Exchange Board of India (International Financial
Services Centres) Guidelines, 2015 - Amendment
Kindly refer to SEBI (IFSC) Guidelines, 2015 which were notified by SEBI on March 27,
2015 and SEBI Circular SEBI/HO/CIR/P/2017/85 dated July 27, 2017.
2. In order to further streamline the operations at IFSC, based on consultations held
with the stakeholders, it has been decided to amend clause 4 (2) of SEBI (IFSC)
Guidelines, 2015 to read as follows:
“4. 2A) Eligibility and shareholding limit for clearing corporations desirous of
operating in IFSC
Any Indian recognized stock exchange or clearing corporation, or, any recognized
stock exchange or clearing corporation of a foreign jurisdiction shall form a
subsidiary to provide the services of clearing corporation in IFSC wherein at least
fifty one per cent. of paid up equity share capital is held by such stock exchange or
clearing corporation.
2B) The remaining share capital may be acquired or held by any other person
(whether Indian or of foreign jurisdiction) and such person shall not at any time,
directly or indirectly, either individually or together with persons acting in concert,
acquire or hold more than five per cent of the paid up equity share capital in a
recognised clearing corporation in IFSC, subject to applicable law:
Provided further that
i) any other stock exchange,
ii) a clearing corporation,
iii) a depository,
iv) a banking company,
v) an insurance company,भारतीय प्रततभतू त और तितिमय बोर्ड
Securities and Exchange Board of India
whether Indian or of foreign jurisdiction for (i) to (v)
vi) a public financial institution of Indian jurisdiction,
vii) a foreign commodity derivatives exchange; and
viii)a bilateral or multilateral financial institution approved by the Central
Government,
may acquire or hold, either directly or indirectly, either individually or together with
persons acting in concert, upto fifteen per cent. of the paid up equity share capital
of such clearing corporation:
2C) For the purpose of clause 2A) and 2B) above, that the provisions of Regulation
19, 19A and 20 of Securities Contracts (Regulation) (Stock Exchanges and
Clearing Corporations) Regulations, 2018 should be, mutatis mutandis, complied
with”.
3. This circular is issued in exercise of powers conferred under Section 11 (1) of the
Securities and Exchange Board of India Act, 1992, to protect the interests of
investors in securities and to promote the development of, and to regulate the
securities market. This circular is available on SEBI website at www.sebi.gov.in.
Yours faithfully,
Amit Tandon
General Manager
Market Regulation Department
Email: amitt@sebi.gov.in