The Securities and Exchange Board of India (SEBI) has issued a major policy proposal to scrap prior approval requirements for stock exchanges and depositories making investments in core-function related businesses and regulatory initiatives.
📌 Key Proposal Details & Governance Framework:
• Streamlined Investment Rules: Waives mandatory prior SEBI approvals for investments tied to core market functions, SEBI-mandated initiatives, and entities regulated by other financial watchdogs.
• Subsidiary Funding Flexibility: Permits exchanges and depositories to deploy internally generated funds via subsidiaries without seeking individual transaction clearances.
• Enhanced Board Oversight: Shifts regulatory oversight toward actual risk profiles, transferring transaction approval responsibility to board-level governance backed by strict financial safeguards.
• Public Comment Deadline: Industry feedback and public comments on the proposal are open through November 12.
• Operational Flexibility: Eliminates legacy rules that subjected low-risk operational investments to the same lengthy approval process as large strategic acquisitions.
💡 Market Takeaway: By granting market infrastructure institutions greater operational autonomy, SEBI is enabling listed exchanges and depositories to move faster in diversifying revenue streams, adopting new technology, and capturing emerging financial market opportunities.