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Exchange listing very much on govt table: Sinha

Minister of State for Finance Jayant Sinha 1

New Delhi: The government today acknowledged regulatory issues in listing of stock exchanges, saying the matter is under consideration.

“The issue of listing of stock exchanges is under consideration… There are some regulatory issues in the listing of stock exchanges,” Minister of State for Finance Jayant Sinha today said at an event here.

It has been over three years since Sebi notified new rules permitting listing of stock exchanges.

In April 2012, the regulator had said 51 per cent of bourses could be held with the public.

The decision considered the much-debated Bimal Jalan Committee recommendations, which have not favoured listing of stock exchanges.

“Stock exchanges will have diversified ownership, and no single investor will be allowed to hold more than 5 per cent except the stock exchange, depository, insurance company, banking company or public financial institution, which may hold up to 15 per cent,” Sebi had said.

“Fifty-one per cent of the holding of stock exchanges will be held by the public.”

There are some riders though. Bourses may be permitted to list when they put in place an appropriate mechanism for tackling conflicts of interest, it had said, adding that they will not be allowed to list on themselves.

Taking note of concerns expressed by the Private Equity and Venture Capital Association (IVCA), Sinha noted that India has all necessary ingredients to become a global investment hub, and removal of Permanent Establishment norms is a huge step forward.

“We want to make sure people who are managing funds in Singapore, Dubai and London are here. We have all the necessary ingredients to become a global investment hub… as far as Permanent Establishment is concerned, that issue is out to rest,” he said.

“You should feel very reassured as an investment manager based in India as your tax with respect to those funds is going to be zero,” he added.

The Minister said the government is in the process of receiving stakeholder comments on the issue of Permanent Establishment.

Finance Minister Arun Jaitley while presenting the Budget for 2015-16 had said that to encourage offshore fund managers to relocate to India, the government will modify Permanent Establishment norms to ensure a mere presence in the country does not lead to “adverse tax” consequences.

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